SEC & CFTC: Crypto isn't a security, but laws are still needed

• Federal agencies have issued 68 pages of new interpretive guidance clarifying that stablecoins, digital commodities, and specific digital tools are not classified as securities.
• While the guidance provides immediate clarity for the industry, experts warn that it lacks the permanence of formal legislation and could be reversed by future administrations.
• Legislative efforts, such as the Clarity Act, remain stalled in the Senate Banking Committee due to disagreements over the treatment of stablecoin rewards.

A New Framework for Digital Assets

The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have jointly released a comprehensive document aimed at taxonomizing the crypto market. This 68-page guidance explicitly states that stablecoins, digital commodities, and certain digital tools fall outside the definition of securities. Ashley Ebersole, co-founder of tx and former SEC senior counsel, noted that this represents the first time agencies have attempted to provide a broad legal authority governing multiple sectors of the industry simultaneously. This move is intended to allow developers to build within the United States with increased confidence.

The Limitations of Interpretive Guidance

Despite the positive reception from the industry, there are concerns regarding the longevity of these rules. Unlike formal rulemaking—which involves a lengthy notice-and-comment process—or federal legislation, interpretive guidance can be more easily rescinded. Lee Schneider, General Counsel at Ava Labs, suggested that while the guidance spurs innovation in the short term, it may not provide the long-term stability businesses require. If a new administration takes office, the SEC leadership could theoretically shift back to a more aggressive enforcement-led approach similar to that of former Chair Gary Gensler.

The Stalled Path to Legislation

Federal regulators and industry leaders agree that only Congress can provide a "future-proof" solution. Current legislative efforts are in a state of flux:

• The House of Representatives passed the Clarity Act with bipartisan support last year.
• The Senate Agriculture Committee passed its own version, but the bill has bogged down in the Senate Banking Committee.
• Disputes over stablecoin rewards remain a primary roadblock for progress in the Senate.

CFTC Chair Michael Selig expressed concern that without a law signed by the President, a future regulator could "take an ax" to the current progress. SEC Chair Paul Atkins reinforced this sentiment at the Digital Asset Summit, describing the guidance as a foundation rather than a final resolution. With a new session of Congress beginning in January 2027, proponents of the industry warn that failure to pass legislation this year could delay definitive rules until 2028 or later.