The United States Establishes the "Five Categories Law" for Cryptographic Assets: A Summary to Understand the New Regulatory Framework

On March 17, 2026, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) jointly released the interpretive document numbered 33-11412, a 68-page regulatory framework officially declaring: the U.S. crypto regulation bids farewell to a decade-long era of "enforcement-based regulation" and enters a new era of clarity and harmonization driven by "Project Crypto."

This document is not only a rare regulatory collaboration result between the SEC and CFTC but also the most milestone-guiding document in the history of U.S. crypto regulation. Below is a summary interpretation of the full text:

I. Background: From Conflict to Collaboration in "Project Crypto"

In 2017, the SEC first applied the Howey test to crypto assets through the "The DAO Report." Over the next decade, regulation primarily relied on enforcement actions to define asset attributes, leaving the market in a long-term state of uncertainty and controversy.

In early 2025, the SEC established the "Crypto Task Force," which subsequently launched the "Project Crypto" initiative co-led by SEC Chairman Paul S. Atkins and CFTC Chairman Michael S. Selig, aimed at coordinating the powers of the two regulatory agencies and establishing a unified asset classification system to provide a clear path for crypto innovation to remain in the U.S. In January 2026, the project officially upgraded to a joint action by the SEC and CFTC.

II. Asset Classification: The "Five Categories" Logic of Crypto Assets

The document classifies crypto assets into five major categories based on asset characteristics, uses, and functions, providing the market with clear classification standards for the first time:

1. Digital Commodities

   Definition: Refers to assets whose value derives from the programmatic operation and supply-demand dynamics of a "functional" crypto system, rather than relying on the management efforts of others.

   Core List: The document explicitly names mainstream tokens such as BTC, ETH, SOL, XRP, ADA, DOT, AVAX, LINK as digital commodities. These assets are not controlled by any single centralized entity and do not possess inherent economic rights to generate passive income.

2. Digital Securities

   Definition: Refers to "tokenized securities," which are traditional securities represented in the form of crypto assets or digital assets with economic substance of securities (such as representing ownership in a company or dividend rights).

   Regulation: Whether on-chain or off-chain, as long as they meet the economic substance, they fall under the SEC's regulatory scope.

3. Regulated Payment Stablecoins

   Definition: Stablecoins issued by authorized entities that meet the definition in the 2025 GENIUS Act.

   Classification: These stablecoins are explicitly excluded from the definition of "securities" and are primarily used as payment tools subject to specific legal constraints.

4. Digital Tools

   Use: Tokens that have practical functions only within specific crypto systems (such as access rights or service payments) and are generally not considered securities.

5. Digital Collectibles

   Definition: Assets intended to be collected and/or used, representing artworks, music, videos, in-game items, or internet memes.

   Examples: CryptoPunks, Chromie Squiggles, WIF, VCOIN, etc.

   Classification: They are not securities in themselves, and their value derives from supply and demand rather than the management efforts of others. However, if they are fragmented and sold, they may constitute securities.

III. Innovation: "Separation" and "Dynamic Conversion" of Securities Attributes

This is the most groundbreaking legal innovation in the document— the SEC acknowledges for the first time that the "securities attributes" of crypto assets are not permanent.

"Separation" Mechanism

• Principle: A project may initially be considered a security (investment contract) due to meeting the Howey test during its fundraising phase. However, once the project completes its roadmap, achieves autonomous operation of open-source code, and decentralizes network power, the asset can be "separated" from the investment contract.

• Judgment Criteria: When investors no longer reasonably rely on the issuer's "core management efforts" to obtain profits but instead rely on the system's operation and market supply and demand, the asset transitions from "security" to "digital commodity."

• Timing of Separation: It can occur immediately when the asset is delivered to the purchaser or at a future date.

Three Scenarios of Separation

1. Issuer Completes Commitments: After completing core management efforts, even if they continue to provide non-core maintenance, the asset is no longer bound by the investment contract.

2. Issuer Abandons Project: If the issuer publicly announces the abandonment of development and no longer fulfills commitments, the asset is detached from securities law jurisdiction (but the issuer may still bear legal liability for fraud).

3. Secondary Market Trading: If subsequent purchasers no longer reasonably expect to rely on the issuer's efforts for profit, the transaction does not constitute a securities transaction.

Transparency Recommendations

The SEC encourages project parties to publicly disclose the progress of their roadmaps and milestone achievements to help the market identify "separation points."

IV. On-Chain Activity Classification: Clearing the Minefield for Decentralization

In response to long-standing controversies surrounding staking, mining, wrapping, and airdrops, the document provides extremely detailed and favorable explanations:

Protocol Mining

• Classification: PoW mining is an "administrative or transactional" activity that ensures network security and verifies transactions.

• Conclusion: Whether solo mining or joining a mining pool, it does not involve securities issuance.

• Mining Pool Operations: The activities of mining pool operators are considered administrative affairs and do not constitute core management efforts.

Protocol Staking

• Classification: Staking is an administrative activity that maintains network operation.

• Coverage: Includes solo staking, delegated third-party staking, custodial staking, and liquid staking.

• Custodial Staking: When custodians stake on behalf of users, as long as it does not involve secondary lending, leverage, or discretionary trading of assets, it does not constitute securities activity.

• Supporting Services: Services such as slash insurance, early unstaking, flexible yield distribution, and asset aggregation are all considered administrative affairs.

Staking Receipt Tokens

• Classification: If the underlying asset is a non-security commodity and not bound by an investment contract, the receipt itself is not a security.

• Principle: The receipt exists only as a "receipt" and does not generate income; income derives from the underlying staking activity.

Wrapping Tokens

• Definition: Users deposit crypto assets with custodians or cross-chain bridges to obtain redeemable wrapped tokens pegged 1:1.

• Classification: If the underlying asset is a non-security commodity and not bound by an investment contract, wrapped tokens are considered "administrative functions" aimed at enhancing interoperability and do not constitute securities transactions.

• Key Limitation: The custodian must lock the assets and may not lend, pledge, or re-stake them.

Airdrops

• Classification Breakthrough: As long as the recipient does not provide money, goods, services, or other consideration, it does not meet the "money investment" element of the Howey test.

• Applicable Scenarios:

  Airdropping to wallets holding specific tokens without prior announcement.

  Rewarding early users of test networks.

  Airdropping to eligible users based on application usage.

• Red Line: If the recipient must provide services (such as social media promotion) in exchange for the airdrop, it may constitute a securities issuance.

V. Consolidation of U.S. Leadership

The document concludes with a detailed analysis of its economic significance:

1. Eliminating the "chilling effect": By providing legal clarity, it reduces business stagnation caused by compliance opacity and encourages crypto innovation to return to the U.S.

2. Lowering compliance costs: Clear classifications and separation paths significantly reduce legal consulting and regulatory response costs for businesses.

3. Enhancing market transparency: The new framework requires more detailed disclosures during the "investment contract" phase, better protecting investors.

4. Promoting competition and innovation: Clear rules will attract more issuers and entrepreneurs to enter the market.

5. Improving pricing efficiency: Reducing price distortions caused by uncertainty.

VI. Historic Breakthrough in Regulatory Collaboration

Structurally, the document establishes a clear analytical path: first classify assets, then determine transaction structures, and finally analyze whether investment relationships continue to exist.

More importantly, this is a rare coordinated result between the SEC and CFTC on crypto regulatory issues. Previously, the two agencies had long-standing disagreements on the definition of "securities vs. commodities," and this joint framework essentially provides a preliminary classification of major asset categories, marking a formal shift in U.S. crypto regulation from a stage of "institutional power competition" to a "division of labor system based on unified rules."

This 68-page document not only ends a decade of regulatory chaos but also establishes the U.S.'s leadership position in the global crypto regulatory landscape. For practitioners, it is a must-read "industry constitution"; for investors, it is a clear "rights protection guide"; for entrepreneurs, it is a definitive "compliance roadmap."

The "Wild West" era of crypto assets has officially come to an end.

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