In a landmark joint statement issued late Friday, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have provided long-awaited clarity on the regulatory classification of digital assets, concluding that the vast majority of cryptocurrencies are commodities, not securities.

The 18-page guidance document, titled “Clarifying the Application of the Federal Securities Laws to Digital Assets,” represents the agencies’ most comprehensive and coordinated position to date. It explicitly states:

“Absent facts indicating an investment contract under the Howey test—such as a centralized issuer promising profits from the efforts of others—the token itself, once distributed and functioning primarily as a medium of exchange or store of value on a decentralized network, is generally a commodity subject to CFTC jurisdiction rather than a security under SEC purview.”

The statement lists several key factors that support commodity status for most cryptocurrencies:

• Decentralization — Tokens operating on fully decentralized networks with no ongoing central promoter or issuer exerting significant managerial effort.
• Functional utility — Use as a medium of exchange, unit of account, or store of value within the protocol.
• Market-driven pricing — Value determined predominantly by supply, demand, and network usage rather than issuer promises.
• Absence of investment contract characteristics — No expectation of profits derived primarily from the efforts of a third party after initial distribution.

Bitcoin and Ethereum are cited as clear examples of commodities, consistent with prior CFTC and court rulings. The agencies also indicate that many Layer-1 tokens, major stablecoins (when fully backed and not promising yield), and widely distributed governance/utility tokens fall outside the definition of securities under current law.

However, the guidance cautions that certain tokens can still be securities, particularly:

• Tokens sold in investment-style offerings with profit expectations tied to issuer efforts.
• Centralized staking-as-a-service products promising yields.
• Certain NFTs or fractionalized assets marketed with investment characteristics.
• Tokens tied to ongoing centralized development teams that retain significant control.

The joint statement emphasizes coordination between the SEC and CFTC to avoid regulatory overlap, with the CFTC taking primary jurisdiction over spot commodity transactions and derivatives, while the SEC retains authority over fraud, manipulation, and investment-contract offerings. Both agencies committed to continued collaboration on enforcement and future rulemaking.

Market reaction was swift and positive. Bitcoin rose above $73,000 in late trading, Ethereum gained over 3%, and many altcoins posted double-digit percentage increases as the “most crypto are not securities” headline circulated. Trading volume spiked across major exchanges, with analysts noting immediate relief among developers, projects, and institutional allocators who had previously operated under uncertainty.

Industry leaders welcomed the guidance as a turning point. “This is the clearest signal yet that the U.S. intends to treat decentralized crypto networks as commodities, not unregistered securities,” said a senior policy advisor at a major crypto trade association. “It removes a massive overhang that has suppressed innovation and capital formation for years.”

The statement arrives amid ongoing legislative efforts (including the House-passed stablecoin bill now in the Senate) and follows a series of court decisions and enforcement actions that had gradually narrowed the SEC’s broadest interpretations of the Howey test. While not legally binding rulemaking, the joint guidance carries significant weight and is expected to influence future enforcement discretion, registration decisions, and private litigation.

Investors and projects will now closely monitor implementation—particularly how the agencies apply the framework to edge cases, staking products, and emerging token designs. For the broader market, however, the message is unambiguous: most functioning cryptocurrencies are commodities under U.S. law.

Cryptocurrency markets remain highly volatile—prices can shift rapidly on regulatory news, macro data, and sentiment. Always verify the latest official statements from sec.gov, cftc.gov, and trusted news sources before making investment decisions.