The head of the US Securities and Exchange Commission strengthens the cryptocurrency framework by setting clearer boundaries for classifying digital tokens.
The U.S. Securities and Exchange Commission, in coordination with the Commodity Futures Trading Commission, has announced a new regulatory framework defining when crypto assets are classified as securities, aiming to clarify their legal treatment in the United States.
The framework is based on the concept of an “investment contract,” whereby a crypto asset is considered a security if it is marketed with promises or commitments from the issuer to generate profits driven by their managerial efforts, creating a reasonable expectation of returns among investors.
The framework also categorizes digital assets into five main groups: digital commodities, digital collectibles, digital instruments, stablecoins, and digital securities. Most of the first categories are generally not subject to securities laws unless they involve clear profit expectations.
Regulators emphasized that an asset’s classification may evolve over time depending on economic reality and issuer behavior, stressing that the key factor is investor reliance on the efforts of others, rather than the asset’s technical structure.