Author: BitpushNews

Has the "Wild West" era of crypto assets officially come to an end?

On March 17, 2026, the U.S. Securities and Exchange Commission ( SEC ) and the Commodity Futures Trading Commission ( CFTC ) jointly released an explanatory document numbered 33-11412. The 68-page regulatory framework officially declared that U.S. crypto regulation had bid farewell to a decade-long era of "enforcement instead of regulation" and entered a new era of clarity and harmony driven by "Project Crypto".

This document is not only a rare example of regulatory collaboration between the SEC and CFTC, but also a landmark guiding document in the history of US crypto regulation. The following is a summary of the full text:

I. Background: From Conflict to Collaboration – “Project Crypto”

In 2017, the SEC applied the Howey test to crypto assets for the first time through "The DAO Report". For the next decade, regulation mainly relied on enforcement actions to define the asset attributes, and the market was in a state of uncertainty and controversy for a long time.

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. The initiative aimed to coordinate the powers of the two regulatory bodies, establish a unified asset classification system, and provide a clear path for crypto innovation to remain in the United States. In January 2026, the project was officially upgraded to a joint SEC-CFTC operation.

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

Based on asset characteristics, uses, and functions, the document categorizes crypto assets into five major categories, providing the market with a clear classification standard for the first time:

Digital Commodities
Definition: Assets whose value originates from the programmatic operation and supply and demand dynamics of a "functional" cryptographic system, rather than from the management efforts of others.
Core List: The document explicitly names major tokens such as BTC, ETH, SOL, XRP, ADA, DOT, AVAX, and LINK as digital commodities. These assets are not controlled by any single centralized entity and do not possess the inherent economic rights to generate passive income.
Digital Securities
Definition: "Tokenized securities" refers to traditional securities represented in the form of crypto assets, or digital assets that possess the economic substance of securities (such as representing corporate ownership or dividend rights).
Regulation: Whether on-chain or off-chain, as long as it meets the economic substance, it falls under the regulatory scope of the SEC.
Regulated Payment Stablecoins
Definition: Stablecoins issued by authorized institutions that meet the definition of the 2025 GENIUS Act.
Qualitative classification: These stablecoins are explicitly excluded from the definition of "securities" and are primarily subject to specific legal constraints as payment instruments.
Digital Tools
Purpose: Tokens that have only a utility function (such as access rights or service payments) within a specific crypto system are generally not considered securities.
Digital Collectibles
Definition: Assets intended for collection and/or use, representing works of art, music, videos, in-game items, or internet memes, etc.
Examples: CryptoPunks, Chromie Squiggles, WIF, VCOIN, etc.
Qualitatively: It is not a security in itself; its value stems from supply and demand rather than the management efforts of others. However, if it is fragmented and sold in pieces, it may constitute a security.

III. Innovation: The "Removal" and "Dynamic Transformation" of Securities Attributes

This is the most groundbreaking legal innovation in the document—the SEC has for the first time acknowledged that the "securities property" of crypto assets is not permanent.

"Separation" mechanism

Principle: In the early stages of financing, a project may be considered a security (investment contract) because it meets the Howey test. However, once the project completes its roadmap, achieves open-source code self-operation, and decentralizes network power, the asset can be "stripped" from the investment contract.
Criterion: When investors no longer reasonably rely on the issuer's "core management efforts" to generate profits, but instead depend on the system's operation and market supply and demand, the asset transforms from a "securities" into a "digital commodity."
The divestiture can occur immediately upon delivery of the assets to the buyer, or at a future date.

Three scenarios of stripping

The issuer has fulfilled its commitment: after completing core management efforts, the assets will no longer be bound by the investment contract, even if non-core maintenance continues to be provided.
Issuer abandons project: If the issuer publicly announces the abandonment of development and ceases to fulfill its commitments, the assets are no longer subject to securities law (but the issuer may still be held legally liable for fraud).
Secondary market transactions: If subsequent buyers no longer reasonably expect to profit from the issuer's efforts, the transaction does not constitute a securities transaction.

Transparency Recommendations

The SEC encourages project teams to publicly disclose roadmap progress and milestone achievements so that the market can identify "stripping points".

IV. Qualitative Analysis of On-Chain Activities: "Minesweeping" for Decentralization

The document provides extremely detailed and favorable explanations for long-controversial activities such as staking, mining, packaging, and airdrops:

Protocol mining

Qualitative characterization: PoW mining is an "administrative or transactional" activity used to ensure network security and verify transactions.
Conclusion: Neither solo mining nor joining a mining pool involves the issuance of securities.
Mining pool operations: The activities of the mining pool operator are administrative matters and do not constitute core management efforts.

Protocol staking

Qualitative characterization: Pledge is an administrative activity for maintaining network operation.
Coverage includes: solo staking, third-party staking, escrow staking, and liquidity staking.
Custody and Pledge: When a custodian pledges assets on behalf of a user, as long as it does not involve secondary lending of assets, leverage, or discretionary transactions, it does not constitute a securities activity.
Supporting services: Slash insurance, early release of pledged shares, flexible profit distribution, asset aggregation, and other auxiliary services are all administrative matters.

Staking Receipt Tokens

Qualitative: If the underlying asset is a non-securities product and is not bound by an investment contract, the certificate itself is not a security.
Principle: The voucher exists only as a "receipt" and does not generate revenue; the revenue comes from the underlying staking activity.

Wrapping tokens

Definition: Users deposit crypto assets with a custodian or cross-chain bridge and receive a 1:1 pegged, redeemable wrapped token.
Qualitative Analysis: If the underlying assets are non-securities and not bound by investment contracts, the packaging of tokens falls under an "administrative function" aimed at enhancing interoperability and does not constitute a securities transaction.
Key restriction: The custodian must lock up the assets and may not lend, mortgage, or re-pledge them.

Airdrops

Qualitative Breakthrough: If 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:
An airdrop to wallets holding a specific token, without prior announcement.
Rewards for early testnet users
Airdrops will be distributed to eligible users based on application usage.
Red line: If the recipient is required to provide services (such as social media promotion) in exchange for the airdrop, it may constitute a securities offering.

V. Consolidation of American Leadership

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

Eliminating the "chilling effect": By providing legal clarity, reducing business stagnation caused by compliance opacity, and encouraging the return of crypto innovation to the United States.
Reducing compliance costs: Clear classification and divestiture paths significantly reduce corporate legal consultation and regulatory response costs.
Enhancing market transparency: The new framework requires more detailed disclosures at the "investment contract" stage to better protect investors.
Promoting Competition and Innovation: Clear rules will attract more issuers and entrepreneurs to the market.
Improving pricing efficiency: Reducing price distortions caused by uncertainty

VI. A Historic Breakthrough in Regulatory Collaboration

Structurally, the document establishes a clear analytical path: first classify assets, then determine the transaction structure, and finally analyze whether the investment relationship continues.

More importantly, this is a rare coordination result between the SEC and CFTC on crypto regulation. Previously, the two agencies had long disagreed on the definition of "securities vs. commodities," but this joint framework has essentially made a preliminary division of the main asset classes, marking a formal shift in US crypto regulation from a stage of "institutional competition for power and responsibility" to a "division of labor system based on unified rules."

This 68-page document not only ended a decade of regulatory chaos but also established the United States' leadership in global cryptocurrency regulation. For practitioners, it is an essential "industry constitution"; for investors, it is a clear "guide to protecting their rights"; and for entrepreneurs, it is a well-defined "compliance roadmap."

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

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