SEC and CFTC Joint Guidance Redefines Token Classification

The U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have jointly released guidance that clarifies when crypto tokens cease to be securities, introducing a dynamic framework for token classification.

According to industry experts, this new interpretation sets out how digital assets may fall in and out of securities classification depending on the presence of ongoing managerial promises. This addresses a long-standing ambiguity that has shaped market behavior in the U.S.

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 in concrete terms when promises tied to a token create an investment contract and when that relationship can end.

The evolving standard could create operational and legal challenges for token issuers, particularly where previously issued tokens remain interchangeable with newly distributed ones tied to updated commitments.

Avery Ching, co-founder and CEO of Aptos Labs, said the joint guidance resolves a critical question around secondary market activity. He pointed out that the explicit classification of several major tokens, including APT, alongside Bitcoin (BTC) and Ether (ETH), as digital commodities rather than securities could have immediate commercial implications.

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.