SEC Says Most Crypto Assets Aren’t Securities, Excludes Mining, Staking, and Airdrops in New Rulebook

The SEC just rewired crypto’s legal map. Chair Paul Atkins unveiled an interpretation that places most crypto assets outside securities law, explicitly excluding protocol mining, staking, and airdrops from being investment contracts. The agency also rolled out a five-part taxonomy and, crucially, separated a token’s status on secondary markets from the terms of its initial fundraising. For exchanges, builders, and allocators, the anchor point is now separability: a crypto asset can be associated with an investment contract at issuance without making the asset itself a security thereafter.

What changed - Most crypto assets do not meet the securities definition under the Commission’s interpretation. - Protocol mining (e.g., on Bitcoin), staking, and airdrops do not, by themselves, constitute investment contracts. - The existence of an investment contract involving a token does not turn that token into a security when it trades later on an exchange. - If purchasers no longer have a reasonable expectation based on an issuer’s managerial claims or promises, federal securities obligations tied to that contract may cease.

Regulatory alignment and a new taxonomy The Commodity Futures Trading Commission said it will administer the Commodity Exchange Act in line with the SEC’s interpretation, signaling interagency alignment while Congress continues to work toward a comprehensive market structure bill. Progress on the CLARITY Act has paused, but the SEC is not waiting for legislation to define boundaries.

The SEC’s framework organizes digital assets into: 1) Digital commodities: assets deriving value from the programmatic operation of a crypto system rather than others’ managerial efforts. Bitcoin and Ethereum are often discussed in this context. 2) Digital collectibles: items linked to creative works, in-game objects, or internet culture; many NFTs and meme coins fit here. 3) Digital tools: utility-oriented assets such as memberships, event tickets, or digital identity credentials. 4) Stablecoins. 5) Digital securities: within the SEC’s remit, including tokenized versions of traditional instruments like equities and U.S. Treasuries.

A pivot from Howey Under prior leadership, the Howey Test dominated digital asset enforcement. Atkins criticized that approach as falling short on clarity and emphasized that investment contracts can come to an end. His line at the DC Blockchain Summit—that the Commission is not meant to regulate everything—drew applause from a room packed with crypto industry professionals.

Safe harbor preview The SEC is preparing proposed exemptions, including: - A sandbox for startups valued up to $5 million to experiment with crypto assets during their first four years. - A pathway to raise up to $75 million via investment contracts involving certain crypto assets. - A glide path for assets once creators have ceased essential managerial efforts.

Atkins expects proposed rules to be released for public comment in the coming weeks.

Why separability matters now This interpretation turns on economic substance rather than labels. If a network’s value is primarily delivered by code and decentralized participation—not by a promoter’s ongoing efforts—then the asset’s secondary trading should not be policed as a securities transaction. That reframing has immediate consequences:

- Exchanges can recalibrate listing policies to assess issuer representations and the current state of managerial influence, rather than treating every token tied to a past raise as radioactive. - Projects gain a credible route to “graduate” once they can demonstrate that essential managerial efforts have ceased and programmatic operation drives value. Expect more rigorous public disclosures about governance handoffs and protocol autonomy. - Investors may approach tokens with less fear that routine secondary trading triggers securities liability; still, issuer claims will be scrutinized, and misstatements will carry real risk. - The bright lines around mining, staking, and airdrops reduce ambiguity for network operators and users, but do not sanitize deceptive fundraising; anti-fraud enforcement remains squarely in play.

This is a bridge, not a finish line. The market will test how quickly assets transition from contract-linked to commodity-like, how exchanges evidence diligence, and how agencies coordinate real-time oversight. The next inflection point arrives when the safe harbor proposals hit the Federal Register and industry weighs in.