TechFlow News, March 21: Alex Thorn, Head of Research at Galaxy Research, posted on X (formerly Twitter) stating that the U.S. Securities and Exchange Commission (SEC), in conjunction with the Commodity Futures Trading Commission (CFTC), issued a landmark digital asset classification guidance this Tuesday. The guidance formally categorizes digital assets into five types: digital commodities, digital collectibles, digital utilities, stablecoins, and digital securities (tokenized securities). It explicitly states that only the final category—digital securities—constitutes a security and thus must be registered or qualify for an exemption under federal securities laws.
This guidance, published as a Commission-level interpretive rule in the Federal Register, expressly supersedes the “investment contract” analytical framework established during the Gensler era in 2019. It also provides two clear pathways for tokens to exit the definition of a security: First, if the issuer completes its core managerial commitments, the investment contract terminates, allowing the token to trade freely on secondary markets as a non-security; second, if the issuer abandons the project or remains silent for an extended period, the investment contract likewise terminates. Furthermore, the guidance clarifies that airdrops, mining, and staking generally do not constitute securities transactions, and that packaging or unpackaging an asset does not alter its status as a security.
Alex Thorn believes this guidance formally marks the end of the hostile regulatory stance toward the crypto industry under Chair Gensler and delivers critical clarity for institutional participation. However, he cautions that interpretive rules lack binding legal force and may be overturned at any time by a new administration—a key reason why the industry continues to advocate for the passage of the CLARITY Act.
