Two important institutions that oversee financial markets in the USA, the Securities and Exchange Commission and the Commodity Futures Trading Commission, have published a comprehensive guide on crypto assets. According to the statement, most digital assets will no longer be considered securities. This step represents a significant departure from the harsh control policies implemented in recent years.
Main Lines of the New Guide
In the 68-page guide published as a joint statement, a detailed classification system was introduced as to whether cryptocurrencies are subject to US securities laws. One of the most striking changes in the guide was the exclusion of stablecoins, digital commodities and assets called “digital instruments” from the scope of securities. Digital collections containing cultural products, art and media representations will likewise not be considered securities.
Descriptions and Classification of Institutions
SEC Chairman Paul Atkins evaluated the change as a long-awaited clarity in the market. In his speech at the DC Blockchain Summit held in Washington, Atkins stated that the guide now offers industry participants a clear framework on the status of digital assets. According to the classification published by the SEC and CFTC, only assets defined as “digital securities” and issued in a similar way to existing financial instruments will be subject to classical securities rules.
“After more than a decade of uncertainty, this commentary will provide market players with clarity on how the Commission evaluates crypto assets,” SEC Chairman Paul Atkins said.
Market Practices and Legal Basis
The guide also includes details on the application of the ‘Howey Test’ to determine whether it is a security or not, which has been discussed for a long time in the crypto markets. According to the test, a digital asset can only be a security if it is marketed as part of a joint venture where profits are promised through the efforts of others. It is stated that assets marketed according to this criterion may lose their security status upon termination of the relevant promise.
Bitcoin mining, staking and certain airdrop transactions are not considered securities within the scope of the new rating. In particular, it was stated that airdrops do not meet the investment purpose and “money investment” requirement, and therefore fall outside the current definition of securities.
CFTC Chairman Mike Selig stated that the joint approach of both institutions increases regulatory cooperation and offers more transparent rules to the industry.
The CFTC announced that it was working in harmony with the SEC by supporting this published framework. Thus, it is noteworthy that the two main regulatory institutions act in coordination.
This new approach is a significant departure from the tight oversight under previous SEC Chairman Gary Gensler. During the Gensler era, numerous crypto companies and tokens were investigated for securities claims, and the industry often criticized this process as “regulation by enforcement.”
With the new guide, it is aimed to overcome many uncertainties in the market and enable crypto companies to carry out their activities in the US market more smoothly.
New Regulation Steps are on the Way
Although the published guidance is not a legal obligation, the SEC plans to introduce additional regulatory recommendations in the coming weeks. Among these, an “innovation exemption” regulation that will provide flexibility to innovative initiatives stands out.
On the other hand, a comprehensive regulation law on crypto asset markets is being prepared in Congress. Managers of the two institutions point out the need for legal regulation for the new approach to be permanent. For now, there has been a significant change in the approach of US regulators to the sector and the long-awaited clarity in the classification of crypto assets seems to have been achieved.
