SEC and CFTC Issue Joint Interpretation on Federal Securities Law Application to Crypto Assets, March 2026

On March 17, 2026, the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission jointly published an interpretation clarifying how federal securities laws apply to crypto assets and transactions involving crypto assets. The interpretation is a final agency statement of position, not a proposed rule, and takes effect upon publication in the Federal Register. The CFTC joined the interpretation to confirm that it will administer the Commodity Exchange Act (CEA) consistent with the SEC's securities law conclusions.

The interpretation provides a token taxonomy covering five categories: digital commodities, digital collectibles, digital tools, stablecoins, and digital securities. It addresses when a non-security crypto asset may become subject to, or cease to be subject to, an investment contract under the Howey test derived from Section 2(a)(1) of the Securities Act of 1933. The interpretation further clarifies the application of federal securities laws to specific market activities: airdrops, protocol mining, protocol staking, and the wrapping of a non-security crypto asset. The CFTC separately states that certain non-security crypto assets may qualify as "commodities" under CEA Section 1a(9).

The joint interpretation directly affects issuers, exchanges, DeFi protocol operators, wallet providers, and custodians. Token issuers may now determine with greater certainty whether their asset constitutes a security and therefore whether SEC registration or an exemption applies. Exchanges operating alternative trading systems can assess which digital assets on their platforms require SEC oversight versus CFTC oversight. DeFi protocol operators conducting staking, mining reward distributions, or wrapping services now have express agency guidance on whether those activities trigger securities law obligations. Custodians holding non-security crypto assets may rely on the CFTC's confirmation that such assets can qualify as regulated commodities.

The interpretation operates as a bridge measure while Congress advances bipartisan market structure legislation. H.R. 3633, the Digital Asset Market Clarity Act of 2025, passed the House on July 17, 2025 by 294 to 134 votes and is pending before the Senate Committee on Banking, Housing, and Urban Affairs. Both SEC Chairman Paul S. Atkins and CFTC Chairman Michael S. Selig stated the interpretation provides interim clarity until that statute is enacted. Open questions remain on the precise boundary between a "digital security" and a "digital commodity" for partially decentralized protocols, and the agencies have not addressed secondary market trading obligations in this document.

Source: CFTC Press Release No. 9198-26, "CFTC Joins SEC to Clarify the Application of Federal Securities Laws to Crypto Assets," March 17, 2026, https://www.cftc.gov/PressRoom/PressReleases/9198-26; H.R. 3633, Digital Asset Market Clarity Act of 2025, 119th Cong. (2025-2026), Congress.gov, https://www.congress.gov/bill/119th-congress/house-bill/3633 (confirmed March 18, 2026).

The information provided is not legal, tax, investment, or accounting advice and should not be used as such. It is for discussion purposes only. Seek guidance from your own legal counsel and advisors on any matters. The views presented are those of the author and not any other individual or organization. Some parts of the text may be automatically generated. The author of this material makes no guarantees or warranties about the accuracy or completeness of the information.