In a major regulatory shift, the US Securities and Exchange Commission (SEC) has issued its first formal framework to determine when crypto assets qualify as securities. The move is expected to bring long-awaited clarity to the digital asset sector, with the regulator indicating that most crypto assets may not fall under federal securities laws.
The framework, presented by SEC Chair Paul Atkins, focuses on the economic nature and real-world use of crypto assets rather than labels. It evaluates factors such as decentralisation, involvement of issuers and whether investors expect profits from managerial efforts. Assets that operate without central control or profit promises are less likely to be treated as securities. The approach aligns with the stance of the Commodity Futures Trading Commission, which views many digital assets as commodities.
The SEC also introduced a classification system that groups crypto assets based on their characteristics and use cases. It clarified that existing laws, including the Howey test, will continue to guide assessments. According to the framework, “establishes four asset categories that are not deemed securities: digital commodities, digital collectibles, digital tools and payment stablecoins under the GENIUS Act,” reinforcing that most crypto assets are not inherently securities.
This development builds on earlier regulatory signals globally. In April 2025, the SEC stated that certain stablecoins may not qualify as securities if they do not promise returns. Similar views were seen in New Zealand, where the NZDD stablecoin was not treated as a financial product. Experts believe the new framework could reduce uncertainty, boost confidence among traders and institutions and support wider adoption. However, some risks remain, as changes in a token’s use could alter its classification, potentially leading to stricter rules or delisting.
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