The SEC, or Securities and Exchange Commission, is the US federal agency that regulates securities markets, enforces securities law, and decides which assets count as securities. For crypto, that last power has mattered more than any other. On 17 March 2026, the SEC and the Commodity Futures Trading Commission jointly published a 68-page interpretation classifying 16 major crypto assets, including bitcoin, ether, solana, and XRP, as digital commodities rather than securities.
What the SEC actually does
Three functions, established by the Securities Act of 1933 and the Securities Exchange Act of 1934 in the aftermath of the 1929 crash.
Disclosure. Companies selling securities to the public must register and disclose material information, so investors can make informed decisions.
Market oversight. Exchanges, broker-dealers, and clearing agencies operate under SEC registration and rules.
Enforcement. The agency investigates fraud, manipulation, and unregistered offerings, bringing civil actions and referring criminal cases to the Department of Justice.
Five commissioners lead it, appointed by the President and confirmed by the Senate, with no more than three from one party. Since April 2025, the chairman has been Paul S. Atkins.
Why the security vs commodity question matters
Here sits the question the entire US crypto debate has turned on.
If a token is a security, its issuer must register with the SEC, disclose extensively, and sell only through registered intermediaries. To list it, exchanges need to be registered securities exchanges. Most of the crypto industry was built on none of those things.
If a token is a commodity, it falls under the CFTC for derivatives and under a much lighter regime for spot trading. Since 2015, Bitcoin has been treated as a commodity.
Deciding which is which relies on a 1946 Supreme Court case, SEC v. W.J. Howey Co. Under the Howey test, the question is whether there is an investment of money, in a common enterprise, with an expectation of profit derived from the efforts of others. Sold to fund a project run by an identifiable team, tokens tend to meet it. On a functioning, decentralized network, they tend not to.
For a decade, the problem was that nobody would say definitively where any specific token fell.
The SEC's enforcement era, 2017 to 2024
From 2017 through 2024, the SEC regulated crypto mainly by suing it.
In the 2017 DAO Report, the agency established that tokens sold through initial coin offerings could be securities. Against dozens of ICO issuers, enforcement followed. In December 2020 the agency sued Ripple over XRP, a case that ran for years and produced a split ruling in 2023 distinguishing institutional sales from exchange sales. In June 2023 it sued two of the largest exchanges operating in the US, alleging they were running unregistered securities exchanges.
Regulation by enforcement, critics called it: settling the security question case by case in court rather than through published rules, with the agency declining to say in advance which tokens qualified. To supporters, the agency was applying existing law to an industry that had chosen to ignore it.
Whichever reading was right, the practical effect was that US crypto businesses operated under sustained legal uncertainty for seven years.
How the SEC's crypto approach changed in 2025
Within months, direction reversed.
Early in 2025 the SEC dismissed or paused several of its highest-profile cases against major exchanges. Under Commissioner Hester Peirce, it formed a Crypto Task Force to develop a workable framework. In January 2024, under the previous leadership, it had already approved the first spot Bitcoin ETFs after a decade of rejections, and spot Ethereum ETFs followed later that year.
In April 2025, Atkins took the chair and announced Project Crypto, an initiative to modernize securities rules for digital assets. Repeated in a November 2025 speech, his stated premise was that most crypto assets are not themselves securities and that the agency should say so plainly.
The March 2026 crypto token taxonomy
Here is the document that reset the map.
On 11 March 2026 the SEC and CFTC signed a memorandum of understanding creating a Joint Harmonization Initiative with six workstreams. They cover product definitions, clearing and margin, dual-registration friction, a fit-for-purpose crypto framework, reporting, and cross-market surveillance.
Six days later the two agencies issued a joint interpretive release setting out a five-category taxonomy.
| Category | What it covers | Treatment |
|---|---|---|
| Digital commodities | Assets whose value comes from a functional network and market forces rather than a promoter's efforts | Not securities |
| Digital collectibles | NFTs and similar items valued for the item itself | Not securities |
| Digital tools | Tokens that function as access or utility within a system | Not securities |
| Stablecoins | Payment stablecoins under the GENIUS Act framework | Not securities |
| Digital securities | Tokens representing traditional securities or investment contracts | Securities |
Among the 16 assets the release named as digital commodities were bitcoin, ether, solana, cardano, avalanche, XRP, dogecoin, and litecoin. It also stated a principle the agency had previously resisted: an investment contract can come to an end. Sold as a security at launch, a token can stop being one once the network it funded becomes functional and decentralized.
Why the taxonomy is not a rule or statute
Worth being precise, because the distinction determines how durable any of this is.
An interpretive release states how regulators currently read existing law. Carrying commission-level weight, it directs enforcement staff at both agencies, and on publication in the Federal Register on 23 March 2026 it took effect.
Not a rule, which would require notice-and-comment procedure. Not a statute, which would require Congress. Without a vote, any future commission can rescind it. In an August 2026 statement, Atkins said as much, describing legislation as indispensable to rules durable enough to survive a future hostile regulator.
Hence the agency's public backing for the CLARITY Act, the market structure bill that would write the jurisdictional split into law. For 15 September 2026, its first Senate floor vote is scheduled.
What the SEC still does in crypto
Even with most tokens classified as commodities, the agency's role is substantial.
- Digital securities. Tokenised stocks, bonds, and funds remain fully under SEC jurisdiction.
- Fundraising. Selling tokens to finance a project run by an identifiable team still triggers securities law.
- ETFs. Every spot crypto ETF is an SEC-registered product.
- Fraud. Anti-fraud authority applies regardless of how an asset is classified, and the agency continues bringing cases involving misrepresentation and manipulation.
- Exchanges listing digital securities. Any platform trading tokenised securities needs registration.
- Rulemaking. Project Crypto's "Regulation Crypto" proposals, aimed at fit-for-purpose exemptions and updated market structure rules, were in development through 2026.
What the new framework means if you trade crypto
Three practical consequences.
For the 16 named digital commodities, the securities question is settled at the administrative level, which removes the legal uncertainty that kept some institutions out.
For newer or smaller tokens with an active issuing team, centralised control, or ongoing fundraising, securities law likely still applies. The taxonomy did not classify the whole market. Only the top of it.
And for anyone relying on US regulatory clarity, the position remains provisional until Congress acts. An interpretation can be reversed. A statute cannot be, without another statute.
Where mb.io fits
mb.io operates under VARA in the UAE and AUSTRAC in Australia, not under the SEC. What the US framework changes is the global context: the largest single market has now stated which major assets are commodities, and regulated venues everywhere benefit from that clarity.
mb.io is a regulated crypto spot exchange backed by MultiBank Group, a financial institution founded in 2005 that serves more than 2 million clients across 100+ countries.
- Regulated by VARA in the UAE and AUSTRAC in Australia
- 10/10 security score from Hacken, an independent blockchain security auditor
- Institutional-grade MPC custody powered by Fireblocks, with segregated client funds
- A curated list of assets, so you're not sorting through thousands of tokens to find the ones worth trading
- Buy, sell, and swap in three steps, from sign-up to purchase
- 24/7 multilingual client support
Open your account and start trading on mb.io.
Frequently asked questions
What does the SEC do?
The SEC regulates US securities markets, enforces securities law, and determines which assets count as securities. Established after the 1929 crash, it oversees disclosure, exchanges, broker-dealers, and enforcement against fraud.
Does the SEC regulate Bitcoin?
Not as a security. Since 2015, Bitcoin has been treated as a commodity, and in March 2026 the joint SEC-CFTC interpretation confirmed it as a digital commodity alongside 15 other major assets.
What is the Howey test?
A four-part test from a 1946 Supreme Court case: an investment of money, in a common enterprise, with an expectation of profit, derived from the efforts of others. Meeting all four makes something a security.
Who is the SEC chairman?
Paul S. Atkins, who took the position in April 2025. To modernize securities rules for digital assets, he launched Project Crypto, and he has publicly supported the CLARITY Act.
What is the crypto token taxonomy?
A five-category classification issued jointly by the SEC and CFTC on 17 March 2026: digital commodities, digital collectibles, digital tools, stablecoins, and digital securities. Only the last category is treated as securities.
Which assets did the SEC classify as commodities?
Sixteen, including bitcoin, ether, solana, cardano, avalanche, XRP, dogecoin, and litecoin. Their value was judged to come from functional networks and market forces rather than from a promoter's efforts.
Can the SEC's crypto guidance be reversed?
Yes. As an interpretation rather than a rule or statute, the March 2026 release could be rescinded by a future commission without a vote. Hence the agency's backing for legislation to make the framework permanent.
What is the difference between the SEC and the CFTC?
Securities fall to the SEC. Commodities and derivatives fall to the CFTC. Most major crypto assets now fall under the CFTC for derivatives, while tokenised securities and fundraising remain with the SEC.
Why did the SEC sue crypto companies before 2025?
Case by case, it applied the Howey test, arguing many tokens were unregistered securities. Regulation by enforcement, critics called the approach, since the agency declined to publish rules stating which tokens qualified in advance.
