WASHINGTON, March 17, 2026 — The U.S. Securities and Exchange Commission issued an interpretation explaining how federal securities laws apply to certain crypto assets and transactions involving crypto assets.
The interpretation describes how existing securities law frameworks — including the concept of an investment contract established by the Howey Test — apply to digital asset markets and related activities.
The Commodity Futures Trading Commission provided guidance relating to the interpretation and said certain non-security crypto assets could meet the definition of a commodity under the Commodity Exchange Act.
The Commission said the interpretation responds to requests from market participants for greater clarity regarding how federal securities laws apply to crypto assets and related transactions.
SEC outlines categories of crypto assets
The interpretation groups crypto assets into categories based on their characteristics, uses, and functions. These categories include digital commodities, digital collectibles, digital tools, stablecoins, and digital securities.
The Commission states that digital commodities, digital collectibles, and digital tools are not themselves securities. However, transactions involving those assets may still constitute investment contracts depending on the circumstances under which they are offered and sold.
Digital commodities are described as crypto assets whose value derives from the programmatic operation of functional crypto systems and market supply and demand rather than from the expectation of profits based on the essential managerial efforts of others.
The SEC cited a number of crypto assets — including Bitcoin, Ether, Solana, Cardano, Avalanche, Litecoin and XRP — as examples of digital commodities based on their characteristics as of the date of the release.
Digital collectibles are described as crypto assets designed primarily for artistic, entertainment, cultural, or collection purposes. Digital tools refer to crypto assets used for functional purposes such as credentials, memberships, or domain names within blockchain-based systems.
Interpretation maintains existing securities law framework
The SEC said the interpretation does not replace the Howey test, which remains the legal framework used by courts to determine whether a transaction constitutes an investment contract under federal securities laws.
Under the Howey test, an investment contract exists when there is an investment of money in a common enterprise with an expectation of profits derived from the efforts of others.
The Commission said that even when a crypto asset itself is not a security, the manner in which it is offered or sold may still create an investment contract. This may occur if issuers make representations or promises that purchasers will profit from the issuer’s essential managerial efforts.
Guidance addresses common crypto ecosystem activities
The interpretation also discusses how federal securities laws may apply to several activities within the crypto ecosystem. These include protocol mining, protocol staking, token wrapping, and token distributions commonly referred to as airdrops.
The SEC said the treatment of these activities depends on the specific facts and circumstances of each case. A key consideration is whether participants reasonably expect profits derived from the efforts of others.
Interpretation part of broader regulatory effort
The Commission said the interpretation reflects its current understanding of crypto asset markets and is intended to provide greater clarity regarding the treatment of digital assets under federal securities laws.
The SEC said the interpretation represents a first step toward developing a clearer regulatory framework for crypto assets and that the agency may refine or expand the interpretation based on public feedback and market developments.
