SEC: Most Crypto Assets Are Not Securities

SEC crypto assets not securities — that's now the official position of the United States Securities and Exchange Commission. In a Tuesday interpretive notice, the SEC formally declared that the vast majority of digital assets fall outside the definition of a security under federal law, handing the crypto industry a policy win years in the making and quietly burying the enforcement-first approach that defined the agency's posture under previous leadership.

What the SEC's Interpretive Notice Actually Says

The notice establishes what the commission calls a 'coherent token taxonomy' — a framework sorting digital assets into categories: digital commodities, digital collectibles, digital tools, stablecoins, and digital securities. Under this taxonomy, the SEC said it would address how a 'non-security crypto asset' may or may not be considered an investment contract under its own jurisdiction, and clarify federal securities laws around airdrops, protocol mining, protocol staking, and the wrapping of non-security crypto assets.

In plain terms: most tokens don't qualify as securities, and the SEC is now putting that in writing. The notice is meant to serve as an 'important bridge,' the commission said, while Congress works on market structure legislation that would formally codify how financial regulators divide oversight of digital assets. The commission urged market participants to review the interpretation to 'better understand the regulatory jurisdiction between the SEC and CFTC' — an acknowledgment that the boundary between the two agencies has been anything but clear.

Only one crypto asset class remains under the securities laws umbrella according to the SEC crypto assets not securities notice: traditional securities that have been tokenized. Everything else — the vast bulk of what trades on crypto exchanges today — does not meet the legal bar.

This is what regulatory agencies are supposed to do: draw clear lines in clear terms. It also acknowledges what the former administration refused to recognize — that most crypto assets are not themselves securities. And it reflects the reality that investment contracts can come to an end.

Why Did the SEC and CFTC Sign an MOU First?

The interpretive notice didn't arrive in isolation. The SEC's move came as one of its first concrete actions following a memorandum of understanding signed with the Commodity Futures Trading Commission — a SEC CFTC memorandum of understanding designed to coordinate oversight across the two agencies and reduce the turf conflicts that plagued crypto regulation for years. That agreement, and this notice, are the operational infrastructure being built ahead of market structure legislation still being negotiated in the US Senate.

The Senate bill is expected to expand CFTC authority over cryptocurrencies — essentially handing the commodity regulator primary oversight of the tokens the SEC just said aren't its problem. Tuesday's notice makes that handoff smoother. It also gives the CFTC a cleaner mandate before any formal legislative transfer of authority takes place.

Call it jurisdictional housekeeping, or call it a choreographed handover — either way, the SEC is actively shrinking its own footprint in crypto. That's a genuine reversal from where this agency stood 18 months ago.

The Departure Nobody's Calling Coincidental

The day before the notice landed — on Monday — the SEC announced that its enforcement division director, Margaret Ryan, had resigned from the agency. Sam Waldon, the principal deputy director, was named acting enforcement director in her place.

Former SEC official John Reed Stark didn't mince words about Ryan's departure. Stark, a 19-year veteran of the agency and the founder of the SEC's Office of Internet Enforcement, rejected the commission's framing that Ryan had prioritized investor protection during her tenure.

At the Paul Atkins DC Blockchain Summit remarks on Tuesday, Atkins presented the new token taxonomy as a practical reset — the kind of clear regulatory guidance the industry spent years demanding. The timing of Ryan's exit, one day prior, was hard to read as anything other than the administration clearing the decks. The SEC's enforcement apparatus just lost its chief on the eve of the agency's most crypto-friendly policy move in its history.

Stark's broader critique hit harder than the personnel drama alone. The SEC, he argued, had stopped functioning like a law enforcement agency. Atkins' Republicans — joined by Commissioners Mark Uyeda and Hester Peirce — hold three of the five seats intended for a bipartisan panel, with the other two still unfilled. As of Tuesday, President Trump had made no announcements about nominating new commissioners to either the SEC or CFTC.

The SEC has abandoned its identity. It has transformed from the cop on Wall Street's beat into something far more troubling, a regulatory body that functions less like a law enforcement agency and more like a concierge service for the largest financial players in the country.

What Does This Mean for Crypto Markets?

The immediate practical impact: the SEC just narrowed its own enforcement targets. Tokens that aren't tokenized traditional securities now sit outside the commission's jurisdiction — in theory, at least. That doesn't mean instant deregulation, and it doesn't mean the CFTC will be passive. But it does mean the legal theory that drove years of SEC enforcement actions against crypto projects — that most tokens were unregistered securities — has been formally walked back by the same agency that deployed it.

For token issuers, this interpretive notice matters even before Congress passes anything. Courts look at agency interpretations. Legal teams defending against SEC actions will cite this document. The practical effect on active and future enforcement cases could be significant, and it arrives while the Senate market structure bill remains in flux.

Whether this is sound policy or a political capitulation dressed up in regulatory language — reasonable people disagree. What's not debatable: the SEC just said it was wrong about most crypto for most of the past decade, without quite using those words.