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On March 17, 2026, the SEC and CFTC issued a joint 68 page interpretive release that explicitly classifies 16 crypto assets as digital commodities under federal law. The document, Interpretive Release No. 33 11412, is now the primary formal regulatory framework defining how federal securities laws apply to crypto assets.
The framework names Bitcoin, Ethereum, Solana, XRP, Cardano, Chainlink, Avalanche, Polkadot, Hedera, Stellar, Litecoin, Dogecoin, Shiba Inu, Tezos, Bitcoin Cash, and Aptos as commodities—not securities—under CFTC jurisdiction rather than SEC oversight.
For digital asset professionals – including developers, lawyers, investigators, and investors – this shift in regulatory jurisdiction brings greater clarity but also new complexity. Understanding how the framework works, and where it stops, is now essential.
How the framework applies the Howey test
The interpretive release applies the Supreme Court's Howey test to crypto assets to determine whether the asset is a security. Under Howey, an investment contract exists when someone invests money in a common enterprise with a reasonable expectation of profits derived from the efforts of others.
The framework makes a critical distinction under Howey: a crypto asset is not, by itself, necessarily a security. Instead, the way the asset is sold – and how it is used over time – determines whether securities laws apply. The release emphasizes the “economic reality” of the asset and its ecosystem, not its label or form.
The release has come up with a five-category taxonomy:
| Category | Description | Classification |
|---|---|---|
| 1. Digital Commodities | Assets whose value is driven by decentralized protocol operation and market supply demand dynamics, rather than the managerial efforts of a central issuer The 16 named tokens fall here. | NOT Securities |
| 2. Digital Collectibles | NFTs and memecoins whose value mainly reflects cultural or community sentiment, not an expectation of financial return. | NOT Securities |
| 3. Digital Tools | Utility tokens that provide access to blockchain based services or functionality and are not marketed or used primarily as investments. | NOT Securities |
| 4. Stablecoins | Tokens designed to maintain a stable value, typically pegged to fiat currency; regulatory treatment depends on structure, with the GENIUS Act providing additional guidance. | Conditional |
| 5. Digital Securities | Tokens that represent traditional financial instruments, or are sold through investment contracts where investors reasonably expect profits from the issuer’s efforts. | Securities |
The release also addresses wrapped tokens explicitly. In general, wrapped tokens are treated as redeemable receipts for the underlying token and do not change the “rights, obligations, or benefits of the underlying, deposited crypto asset.” As a result, a wrapped token is generally classified as if it were the underlying asset itself.
The security-to-commodity pathway: Decentralization is key
The framework also sets out a specific pathway for when a token can move from being treated as a security to being treated as a digital commodity. In essence, tokens can transition from securities to commodities as their underlying projects achieve genuine decentralization. This dynamic classification represents a departure from traditional securities law, which historically treated asset classification as fixed at the time of issuance.
The decentralization test: A token that initially meets the Howey test can later exit the securities classification when the network achieves genuine decentralization.
The SEC's criteria focuses on whether investors continue to reasonably rely on an issuer's "essential managerial efforts" to generate profits. Once a project completes its roadmap, achieves autonomous operation through open-source code, and decentralizes network control, the asset can separate from the investment contract.
This logic helps explain why assets such as Ethereum and Solana, which launched via token sales, are now treated as commodities. Their networks now operate largely autonomously rather than under a single controlling entity.
CFTC vs. SEC oversight: Understanding the risk trade-offs
Commodity classification shifts oversight from the SEC's disclosure-heavy emphasis to the CFTC's market-conduct focus. This jurisdictional change creates measurable differences in investor protection and regulatory enforcement.
What CFTC oversight means: The CFTC regulates commodity derivatives markets—futures, options, and swaps—and has anti-fraud authority over spot commodity transactions. However, the CFTC does not regulate spot commodity markets the way the SEC regulates securities markets.
The CFTC does not impose the same breadth of registration, disclosure, and reporting requirements. Commodities regulation also does not mandate the same level of financial transparency, audit requirements, or fiduciary obligations that securities law imposes.
For investors and creditors, this translates into a different risk profile: less prescriptive disclosure, fewer ongoing reporting obligations, and a greater reliance on market surveillance and anti‑fraud enforcement after the fact. If fraud or manipulation occurs in spot markets for these commodities, recourse mechanisms differ from securities law remedies.
Staking, mining, and airdrops under the framework
The interpretive release explicitly addresses three core crypto activities that previously existed in regulatory limbo:
- Staking: The release clarifies that protocol staking on proof‑of‑stake networks falls outside securities law across four models—solo staking, self‑custodial staking with a third party, custodial arrangements, and liquid staking—provided participants are simply receiving rewards for securing the network
- Mining: Similarly, receiving cryptocurrency as a mining reward is not treated as a securities offering or transaction, removing prior uncertainty about whether mining rewards trigger registration obligations.
- Airdrops: Distributions of non‑security crypto assets to recipients who provide no money, goods, services, or other consideration fall outside securities law because the ‘investment of money’ element of Howey is not met.
Although not binding, the release gives significantly greater clarity over these areas. Our earlier analysis of staking and Ethereum ETF approvals highlighted unresolved questions around incorporating staking yields into ETF structures. This interpretive release removes some of those barriers and is likely to accelerate product development.
Framework limitations: What it’s not
The March 17 release is an interpretive release, not legislation.
It reflects the agencies’ current view of how existing law applies, rather than creating new law. A future SEC chairman could issue a new interpretation that supersedes this release, though reversing a jointly signed release is more difficult than walking back informal staff guidance.
SEC Chairman Paul Atkins acknowledged this explicitly, stating that only Congress can make regulation permanent through market structure legislation.
What this means for digital asset markets
The SEC and CFTC's March 17, 2026, interpretive release establishes a formal framework for classifying certain crypto assets under federal law. The five-category taxonomy, application of the Howey test to transactions rather than assets, and explicit safe harbors for staking, mining, and airdrops provide regulatory clarity that did not previously exist.
The framework's limitations matter. An interpretive release can be revised by a future administration and is thus not a codified statute. While it addresses federal securities law, it does not preempt state regulation (e.g., money transmission laws, state securities laws), alter tax treatment (e.g., IRS tax obligations), or affect AML requirements (e.g., FinCEN Bank Secrecy Act requirements). International jurisdictions (e.g., EU’s MiCA) operate under separate frameworks.
The interpretive release provides greater clarity on questions that have been legally uncertain for over a decade. Whether it provides sufficient investor protection while enabling technological innovation remains an open question that will be answered through enforcement actions, court decisions, and potential Congressional legislation.
