SEC, CFTC Declare Ethereum, Solana and 14 Cryptos Not Securities

After more than a decade of debate, enforcement actions, and industry lobbying, U.S. regulators have taken a decisive step toward clarifying how cryptocurrencies fit into federal law. On March 17, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) jointly issued a sweeping 68-page interpretive release that formally classifies a broad range of crypto assets – including some of the industry’s most prominent tokens – as digital commodities, not securities.

The move marks a pivotal turning point for the digital asset sector, which has long argued that existing securities laws, written nearly a century ago, were ill-suited to govern decentralized blockchain-based systems.

A Clear Line at Last

For the first time, U.S. regulators have explicitly named 16 major cryptocurrencies as digital commodities under federal law. The list includes:

• Bitcoin
• Ether
• Solana
• XRP
• Dogecoin
• Cardano
• Avalanche
• Chainlink
• Polkadot
• Hedera
• Litecoin
• Bitcoin Cash
• Shiba Inu
• Stellar
• Tezos
• Aptos

By designating these assets as commodities, the agencies have effectively removed them from the direct scope of federal securities regulation – a development widely celebrated across the crypto industry.

“This is of profound importance,” said Miller Whitehouse-Levine, CEO of the Solana Policy Institute. “It’s what we’ve been asking for from the agency for 10 years.”

A New Taxonomy for Crypto

At the heart of the release is a structured framework that organizes all crypto assets into five distinct categories:

1. Digital commodities
2. Digital collectibles
3. Digital tools
4. Stablecoins
5. Digital securities

Only the final category – digital securities – falls under traditional SEC oversight.

The first three categories are explicitly defined as non-securities, regardless of how they are issued or distributed. Stablecoins, while treated separately, are also excluded from securities classification under this interpretation.

A digital commodity, according to the document, is a crypto asset whose value is derived from the programmatic operation of a functional blockchain system and broader market supply-and-demand dynamics – not from the managerial efforts of a centralized issuer.

This definition directly addresses one of the most contentious issues in crypto regulation: whether tokens rely on the efforts of others to generate profits, a key component of the Howey Test, the legal standard used to determine whether an asset qualifies as a security.

Resolving Longstanding Uncertainty

Beyond classification, the release tackles several core activities that have long existed in regulatory gray areas.

Protocol mining, the computational work performed by validators on proof-of-work networks like Bitcoin, is now classified as a ministerial activity, not a securities transaction.

Similarly, staking on proof-of-stake networks – across all major models – receives the same treatment. This includes:

• Solo staking
• Self-custodial staking with third parties
• Custodial staking services
• Liquid staking

In all cases, staking is not considered a securities transaction under federal law.

The guidance also clarifies the status of airdrops, stating that tokens distributed to recipients who provide no payment or consideration do not meet the first prong of the Howey Test – an “investment of money.” As such, these distributions fall outside securities law.

Together, these clarifications resolve years of uncertainty that had left developers, exchanges, and investors navigating a fragmented and often contradictory regulatory environment.

A Shift From Enforcement to Interpretation

The March 17 release represents a notable shift in tone and approach from previous SEC leadership.

Under former SEC Chair Gary Gensler, the agency pursued an aggressive enforcement strategy, asserting that most crypto assets were securities and bringing cases against major industry players.

By contrast, current SEC Chair Paul Atkins emphasized a more structured and collaborative framework.

“I am pleased to announce that the SEC’s persistent failure to provide clarity on this question is over,” Atkins said during remarks at the DC Blockchain Summit.

He added that the Commission is now implementing a “token taxonomy and investment contract interpretation” that distinguishes between the asset itself and the circumstances under which it is offered.

This distinction is crucial. Even if a token is classified as a non-security, it can still fall under securities laws if it is sold as part of an investment contract – for example, if an issuer promises profits based on its managerial efforts.

“The real meat of it is the investment contract analysis,” Whitehouse-Levine noted, emphasizing that how a token is marketed remains just as important as what it is.

Coordination Between Regulators

The guidance did not emerge in isolation. Just days earlier, on March 11, the SEC and CFTC signed a Memorandum of Understanding (MOU) establishing a Joint Harmonization Initiative.

The initiative aims to coordinate oversight across:

• Rulemaking
• Enforcement
• Market examinations

It is co-led by Robert Teply of the SEC and Meghan Tente of the CFTC, and seeks to reduce regulatory friction – particularly for exchanges and intermediaries that fall under both agencies’ jurisdictions.

CFTC Chair Michael Selig described the MOU as the foundation for a “harmonized framework that modernizes oversight to match how markets actually operate.”

Atkins echoed that sentiment, criticizing decades of inter-agency rivalry for pushing innovation offshore.

SEC enhances market trust and helps reduce risks for investors

Industry Reaction: Celebration – With Caution

The crypto industry responded swiftly and enthusiastically.

Executives, attorneys, and investors flooded social media with praise, with some calling the guidance a historic breakthrough.

“Hang it in the Louvre,” wrote Alexander Grieve of venture firm Paradigm.

Yet beneath the celebration lies a note of caution.

The release is interpretive, not statutory. That means it does not carry the force of law and could be reversed by future regulatory leadership.

Atkins acknowledged this limitation directly, stressing that only Congress can provide lasting certainty.

The CLARITY Act: The Next Step

That legislative solution may already be in progress.

The CLARITY Act, a comprehensive digital asset market structure bill, aims to codify the very distinctions outlined in the SEC-CFTC guidance.

The bill:

• Passed the House of Representatives in July 2025
• Cleared the Senate Agriculture Committee in January 2026
• Awaits further action in the Senate Banking Committee

If enacted, it would enshrine into law the commodity-versus-security framework, providing a durable foundation for crypto regulation in the United States.

Senate Banking Committee Chair Tim Scott indicated that an updated draft of the bill could be released soon, signaling continued momentum.

A Defining Moment for Crypto Regulation

The March 17 interpretive release may ultimately be remembered as a watershed moment – not because it settles every question, but because it finally establishes a coherent starting point.

For years, the crypto industry has argued that digital assets represent a fundamentally new asset class, one that does not fit neatly into existing legal categories. With this guidance, regulators appear to agree – at least in part.

By distinguishing between tokens as technologies and tokens as investment contracts, the SEC and CFTC have drawn a line that could reshape how innovation unfolds in the U.S.

The implications are far-reaching:

• Developers gain clearer rules for building blockchain networks
• Exchanges face reduced regulatory ambiguity
• Investors receive more predictable legal treatment

But the work is far from complete.

As Atkins himself noted, “Only Congress can ensure that regulation in this area is future-proofed.”

Until then, the crypto industry – and the regulators overseeing it – will continue navigating the evolving boundary between innovation and oversight.

Still, for the first time in years, that boundary is no longer invisible.

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