SEC and CFTC Joint Guidance Boosts Institutional Crypto Access

The US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have jointly issued guidance on when crypto tokens cease to be securities, a move that could expand institutional participation in the market. The joint framework introduces a dynamic test for determining whether a digital asset is tied to an 'investment contract', which can change over time.

The new guidance clarifies that a crypto asset is not inherently a security, but may be classified as one depending on how it's marketed and the promises made by issuers. This means that certain tokens, such as Bitcoin (BTC), Ethereum (ETH), and APT, are now considered commodities rather than securities.

Avery Ching, co-founder and CEO of Aptos Labs, said the guidance resolves a critical question around secondary market activity. 'For assets like APT that are explicitly named as digital commodities, that question is now answered,' he stated.

The ability to treat certain tokens as commodities rather than securities could reduce compliance barriers for banks, asset managers, and exchanges, potentially accelerating the rollout of crypto products across traditional financial platforms.