Morning Minute: The SEC & CFTC Declare ‘Most Crypto Assets’ Are Not Securities

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GM!

Today’s top news:

• Crypto majors are slightly red ahead of today’s FOMC; BTC at $72.9k
• The SEC and CFTC issue joint guidance clarifying application of securities law to crypto, state most are not securities
• Mastercard acquired stablecoin infra platform BVNK for $1.8B
• Aster announced its Aster Chain launch, ft. privacy, staking and new partnerships
• Vanity Fair piece raises questions over crypto’s image

⚖️ The SEC & CFTC Declare “Most Crypto Assets” Are Not Securities

SEC Chair Paul Atkins took the stage at the DC Blockchain Summit Tuesday and issued the most consequential regulatory guidance for crypto in a decade.

The headline: “most crypto assets” are not securities.

Bitcoin mining rewards, staking, and airdrops are explicitly not securities.

The SEC formally divided the digital asset universe into five buckets: digital commodities, digital collectibles, digital tools, stablecoins, and digital securities. Only the last category falls under SEC jurisdiction as securities.

The practical implication is sweeping. For years, the Howey Test, the vague standard Gensler weaponized, created legal risk for nearly every token. Atkins called that approach a “persistent failure to provide clarity.”

Under his taxonomy, most NFTs and meme coins would be digital collectibles (outside SEC purview). Most protocol tokens would be digital commodities or tools (CFTC territory). Only tokenized stocks and bonds remain squarely with the SEC.

Atkins also previewed a safe harbor framework coming in the “next few weeks”, including exemptions for startups under $5M experimenting with crypto in their first four years, and for entrepreneurs raising up to $75M via crypto investment contracts.

He said he expects proposed rules for public comment soon. He also directed SEC staff to allow brokers to offer crypto and traditional securities side by side, without needing multiple licenses – a structural change that could open crypto to a new class of registered intermediaries.

“We’re not the Securities and Everything Commission,” Atkins said, drawing applause.

Key Details

The 68-page document provides interpretative guidance across the following aspects of crypto and digital assets:

• SEC formally categorizes crypto into 5 groups: digital commodities, digital collectibles, digital tools, stablecoins, digital securities
• Bitcoin mining, staking, and airdrops are explicitly excluded from securities classification
• Safe harbor proposals coming “in the next few weeks” – exemptions for small projects and up to $75M raises
• Brokers to be allowed to offer crypto and traditional securities side by side without multiple licenses
• SEC directing staff to evaluate allowing non-security crypto assets to trade on unregistered platforms
• Atkins: “We’re not the Securities and Everything Commission”

Dig In Deeper

The SEC went further than just defining these categories – they also provided examples to help clarify the guidance.

• Digital Commodities: Assets whose value derives from the programmatic operation of a functional, decentralized blockchain network and not from the managerial efforts of any team.
  • Examples from the guidance: Bitcoin (BTC), Ether (ETH), Solana (SOL), XRP, Cardano (ADA), Avalanche (AVAX), Chainlink (LINK), Dogecoin (DOGE), Bitcoin Cash (BCH), Aptos (APT).
• Digital Collectibles: Assets tied to art, music, memes, trading cards, in-game items, or current events.
  • Examples: CryptoPunks, Chromie Squiggles, Fan Tokens, WIF (dogwifhat), VCOIN. The defining feature is that they’re collected or traded for their own properties, not as investment vehicles in a common enterprise.
• Digital Tools: Tokens that perform a practical function like memberships, event tickets, credentials, identity badges, domain names.
  • Examples: Ethereum Name Service (ENS) domain names, CoinDesk’s “Microcosms” NFT Consensus Ticket. Function over investment expectation is the dividing line.
• Stablecoins: Any payment stablecoin issued by a permitted issuer under the GENIUS Act is explicitly a non-security.
  • This is the narrowest category as the SEC notes other stablecoins “may still be securities depending on facts and circumstances,” leaving yield-bearing or algorithmic variants in potential gray zones.
• Digital Securities: the sole class that remain securities, defined as traditional financial instruments represented on a blockchain.
  • Examples: Tokenized stocks, tokenized U.S. Treasuries, tokenized bonds, BlackRock’s BUIDL fund or tokenized T-bills like USTB. The blockchain wrapper doesn’t change the underlying legal nature would fall here.

Why It Matters

The Gensler SEC never published rules for crypto.

It governed by lawsuit and enforcement actions.

Coinbase, Binance, Kraken, Ripple and Uniswap all faced enforcement actions under the theory that their tokens were already securities and everyone should have known.

There was no formal taxonomy, no safe harbors, no clarity on who was in or out.

The message to builders was unmistakable: launch offshore, carve out U.S. users from airdrops, and lawyer up.

The practical result was a decade of capital flight. Projects structured around Cayman Islands DAOs, blocked American IPs from token sales, and treated the U.S. as a market to route around.

Now there is finally clear guidance for the industry, with concrete definitions of terms and clear examples.

And this guidance changes three things concretely:

• Teams can now self-classify their token before launch rather than guessing whether they’ll get sued later;
• Airdrops and staking are explicitly non-securities, eliminating the legal risk that kept U.S. users blocked from distributions for years; and
• The new “investment contract off-ramp” gives genuinely decentralized projects a documented legal path to graduate out of securities classification entirely.

It’s a breath of fresh air. And the beginning of a new crypto era in the US…

? Macro Crypto and Markets

Corporate Treasuries & ETFs

• The Bitcoin ETFs saw $199.4M in net inflows on Tuesday; the ETH ETFs had $138M in inflows including $67M from ETHB (BlackRock’s new ETH staking ETF)

Meme Coin Tracker

• Meme majors were mostly red; DOGE -3%, SHIB -2%, PEPE -3%, TRUMP -3%, PENGU -2%, SPX -4%, FARTCOIN +1%
• LUCIA (+62x), testicle (+48%) and Lobstar (+58%) led top onchain movers

? Token, Airdrop & Protocol Tracker

? What is happening in NFTs?

• NFT leaders were mixed; Punks even at 29.1 ETH, Pudgy -1% at 4.25 ETH, BAYC -3% at 5.18 ETH; Hypurr’s +6% at 434 HYPE
• Gazers (+6%) led notable movers
• Rekt x Moonbirds “birb bubbly” launch goes live today at 12 pm ET
• Azuki introduced “TCG: Gates Awakened” as next focus