washington

The Commodity Futures Trading Commission (CFTC) has partnered with the Securities and Exchange Commission (SEC) to clarify how certain federal securities laws apply to various crypto assets and their related transactions. The aim is to guide the CFTC and its staff in their administration of the Commodity Exchange Act, aligning it with the SEC’s interpretation. This move is seen as a significant step towards providing clearer guidelines for crypto assets, and it complements ongoing efforts in Congress to establish a comprehensive framework for the market.

“For a long time now, innovators and entrepreneurs in America have been waiting for clear guidance on how crypto assets fit within federal laws,” remarked CFTC Chairman Michael S. Selig. “With today’s interpretation, that wait has ended. Chairman Atkins and I are focused on creating a regulatory space where the cryptocurrency industry can flourish here in the U.S., guided by sensible rules. Our agencies’ joint action today highlights our commitment to formulating effective regulations for this evolving financial landscape.”

SEC Chairman Paul S. Atkins added, “After years of ambiguity, this interpretation will shed light on how we will treat crypto assets under federal securities laws. Regulators ought to communicate clearly. It also recognizes that, contrary to what the previous administration suggested, most crypto assets aren’t securities themselves. Additionally, it takes into account that investment contracts can indeed be terminated. This is a critical bridge for both entrepreneurs and investors, especially as Congress pushes forward with bipartisan market structure legislation. I’m eager to work with Chairman Selig on implementing this.”

The SEC’s interpretation includes several key points:

• It clarifies the definition of “security” as it pertains to crypto assets and related transactions.
• It establishes a consistent classification for digital goods, collectibles, tools, stablecoins, and digital securities.
• It explains how certain “non-securities” crypto assets might relate to investment contracts.
• It clarifies the application of federal securities laws concerning airdrops, protocol mining, staking, and wrapping non-secure crypto assets.

The CFTC indicates that it will administer the Commodity Exchange Act in a manner consistent with the SEC’s interpretation and notes that some non-security crypto assets could be classified as “commodities” under this Act. This interpretation is intended to delve deeper into digital products.

Those involved in the crypto market, including innovators, issuers, and individual investors, should reflect on this interpretation to grasp the regulatory boundaries between the SEC and the CFTC. The interpretation will be available on CFTC.gov and published in the Federal Register.