- U.S. Securities and Exchange Commission and Commodity Futures Trading Commission classify BTC, ETH, ADA, and XRP as commodities
- New guidance divides crypto into five categories, clarifying when assets qualify as securities
- SEC Chair Paul Atkins says the move ends arbitrary regulation and refocuses investor protection.
The US Securities and Exchange Commission, joined by the Commodity Futures Trading Commission released an interpretation on Tuesday, spelling out how securities rules apply to some crypto assets and transactions. The interpretative guidance, which confirmed that assets like BTC, ETH, ADA, and XRP are commodities, expands the SEC’s commitment to providing industry-wide clarity and advancing digital asset innovation on American soil.
Crypto Asset Classification Framework and Legal Distinctions
The SEC’s latest interpretation aligns with Project Crypto, which follows the recommendations of President Trump’s Working Group On Digital Asset Markets, where the SEC, CFTC, and other agencies were mandated to work on certain priorities that would foster digital asset innovation and leadership in the US.
Accordingly, the SEC has exhaustively clarified the definition of a security and explained its nuances. It recognized the vastness of crypto assets and classified them into five categories based on their features, namely: digital commodities, digital securities, digital collectibles, stablecoins, and digital tools.
However, the securities regulator emphasized that digital collectibles, digital commodities, and digital tools “are not themselves securities” but can be classified as such when they are offered and sold as part of an investment contract.
For stablecoins, the SEC noted that they are a “broad category” and could either be securities or non-securities based on their unique characteristics. Meanwhile, payment stablecoins under the GENIUS ACT are not deemed to be securities, according to the agency’s interpretive initiative.
The SEC further recognized that there may be many other crypto assets that do not fall under any of the above categories or which simultaneously fall under several asset classes due to the evolution and wide variation of digital assets.
Market Impact and Industry Reactions
A key highlight of the interpretation is the explicit classification of major crypto assets as securities, aiming to resolve longstanding regulatory uncertainty and shift away from enforcement-driven oversight.
After defining commodities, the SEC provided examples to include Avalanche (AVAX); Bitcoin (BTC), Ether (ETH), Bitcoin Cash (BCH), Aptos (APT), Cardano (ADA), Chainlink (LINK), Litecoin (LTC), Stellar (XLM), Polkadot (DOT), Shiba Inu (SHIB), Solana (SOL), XRP (XRP), Tezos (XTZ), and Dogecoin (DOGE).
As a result, only one crypto asset class—digital securities or traditional securities that are tokenized—remains under the SEC’s direct securities law jurisdiction.
SEC Chair, Paul Atkins, stated at the Digital Chamber Blockchain Summit that the clear framework streamlines the agency’s regulatory scope.
“This distinction,” said Atkins, “ returns the SEC to its core mission and statutory authority of protecting investors involved in securities transactions.” “We are not the securities and everything commission anymore.”
In his reaction, Ripple’s Chief Legal Officer, Stuart Alderoty, thanked the Crypto Task Force for its delivery of clarity to the industry, while pointing out that they “always knew XRP wasn’t a security.”
