The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) jointly released interpretive guidance last night regarding the status of cryptocurrencies under current federal securities laws. After years of confusion for investors regarding the classification of securities and commodities, regulators have finally taken a significant step towards the long-awaited clarity. According to the document, the SEC and CFTC have defined digital commodities and listed 16 altcoins as examples.
According to the shared guidelines, an asset must meet specific criteria to be considered a digital commodity. Therefore, if the value of a crypto asset is based on the programming operations of a system and supply-demand balance, rather than expected profits, that asset is classified as a commodity.
The cryptocurrencies listed in the guidance released by the SEC and CFTC include: “Aptos (APT), Avalanche (AVAX), Bitcoin (BTC), Bitcoin Cash (BCH), Cardano (ADA), Chainlink (LINK), Dogecoin (DOGE), Ethereum (ETH), Hedera (HBAR), Litecoin (LTC), Polkadot (DOT), Shiba Inu (SHIB), Solana (SOL), Stellar (XLM), Tezos (XTZ), and XRP (XRP).”
The statement noted that these 16 cryptocurrencies do not fall under the category of securities.