SEC and CFTC Joint Guidance Clears Path for Institutional Crypto Access

The US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have jointly released new guidance on how to classify digital assets as commodities or securities. This clarification has significant implications for institutional participation in the crypto market.

Under the new framework, a digital asset is not inherently a security, but may be tied to an 'investment contract' depending on how it's marketed and the expectations set by issuers. Regulators have clarified that such classification is not permanent, and can change over time based on promises made by issuers.

Mari Tomunen, general counsel at DoubleZero, said the framework introduces a fundamental shift in how legal analysis is applied to digital assets. She noted that the interpretation outlines when promises tied to a token create an investment contract and when that relationship can end. The test is dynamic, meaning it can change over time based on new promises or milestones.

The guidance has immediate commercial implications for large financial institutions. Avery Ching, co-founder and CEO of Aptos Labs, said the joint guidance resolves a critical question around secondary market activity. He noted that the explicit classification of several major tokens, including APT, as digital commodities rather than securities will have significant downstream effects on what banks, asset managers, and exchanges can offer their clients.

The ability to treat certain tokens as commodities rather than securities is expected to reduce compliance barriers, potentially accelerating the rollout of crypto products across traditional financial platforms. Regulators said the move is intended to bring coherence to a fragmented regulatory landscape and align oversight between the SEC and CFTC.