Deregulation of U.S. regulatory policies

Today, a landmark policy to clarify the status of crypto assets has finally been implemented in the United States.

The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have jointly provided a detailed classification and definition of crypto assets, clearly stating which types of crypto assets fall under the jurisdiction of the SEC and which types fall under the jurisdiction of the CFTC.

This new policy currently defines five major categories of assets: digital commodities, digital collectibles, digital tools, stablecoins, and digital securities.

• Digital Commodities

The various blockchain-native tokens we commonly see (including BTC, ETH, SOL, etc.) fall under "digital commodities." These assets are clearly regulated only by the CFTC.

• Digital Securities

Stock tokens, bond tokens, and other similar assets that have been hotly debated in the ecosystem over the past couple of years clearly fall under SEC regulation.

• Digital Collectibles

Well-known NFTs (such as the specifically mentioned CryptoPunks and Chromie Squiggles), meme coins, and similar collectibles do not provide holders with an expectation of financial returns, so they are not regulated by either the SEC or the CFTC.

However, if an NFT carries rights or interests that have an expectation of financial returns, such as issuing securities or bonds in the form of NFTs, then they fall under SEC regulation.

• Digital Tools

Digital tools refer to crypto assets used as tools within the crypto ecosystem, such as ENS domains, membership cards, etc.

These assets are regulated by the SEC during their development phase (i.e., before the network is actually formed), and once their network is established and decentralized, they fall under CFTC regulation.

• Stablecoins

Well-known stablecoins like USDT and USDC belong to this category.

If a stablecoin is used merely as a "cash equivalent" in payment scenarios, it falls under CFTC regulation.

However, if the value of a stablecoin is pegged to income-generating assets, it falls under SEC regulation. Upon seeing this, I am reminded of a type of stablecoin in the ecosystem that can automatically generate interest. According to this new regulation, such stablecoins should fall under SEC regulation, and theoretically, holders would need to undergo qualification certification.

Additionally, the new regulation also provides clear explanations for several frequently occurring actions in the crypto ecosystem:

• Mining

This does not count as issuing securities.

The reasoning provided by the new regulation is that this is a behavior for network maintenance and the generation of decentralized consensus. The rewards obtained from mining are based on computational contributions (PoW) or algorithmic presets, rather than investing in a "common enterprise" and relying on the management efforts of others.

• Staking

At the protocol level, staking does not count as securities; however, if custodial staking is involved, specific conditions must be met.

If an individual stakes directly on a chain node or delegates staking, it is viewed as participating in network consensus and does not constitute a securities action.

If staking is done through an exchange or intermediary, as long as the intermediary does not engage in secondary lending, leveraged trading, or discretionary trading, and only charges service fees as a technical interface, it is also not considered a securities issuance.

Liquid Staking Tokens (LST): For example, stETH, as long as the underlying asset is a "digital commodity" (like ETH) and the token only serves as proof of redemption rights without an additional profit distribution mechanism, it is generally not considered a security.

• Airdrops

This also does not count as issuing securities.

The SEC believes that as long as the recipient does not provide money, goods, services, or other substantial consideration, the airdrop does not meet the "investment of money" element of the Howey Test.

Applicable scenarios include airdrops to specific token holders, rewards for early users of test networks, or airdrops based on application usage records, all of which are explicitly categorized as non-securities actions.

• Wrapped Assets (Wrapped BTC / Assets)

This does not count as issuing securities.

Regulatory rules state that as long as the wrapping protocol (like wBTC) is 1:1 pegged to an underlying non-security asset (like BTC), and its primary function is to provide cross-chain interoperability rather than "raising funds," then this "wrapping" behavior is viewed as a technical mapping.

I believe this rule has clearly explained most of the issues that have troubled us deeply.

In summary, according to this new regulation, the vast majority of activities that users participate in within the crypto ecosystem (as long as they are not buying or selling tokenized securities or bonds) are basically not regulated by the SEC, and are not subject to the constraints and limitations faced by traditional securities investors.