SEC Issues Interpretive Release on Crypto Assets Superseding 2019 Staff Framework

Overview

On March 17, 2026, the Securities and Exchange Commission (SEC) issued an interpretive release, Statement on the Application of Federal Securities Laws to Crypto Assets (the “Release”), addressing the application of the federal securities laws to crypto assets, certain blockchain based programs, as well as specific distribution methods. The Commodity Futures Trading Commission (CFTC) joined the interpretation, stating that it will administer the Commodity Exchange Act consistently with the Release. The Release supersedes and withdraws the SEC staff’s April 3, 2019 Framework for “Investment Contract” Analysis of Digital Assets (the “Framework”).

The Release provides a more structured articulation of how the agencies analyze crypto assets and transactions under existing law. It introduces a taxonomy of crypto assets, clarifies how a non-security crypto asset may nonetheless be offered or sold as part of an investment contract, describes when secondary transactions of non-security digital assets may be part of an investment contract, and addresses recurring activities such as protocol mining, staking, wrapping, and certain airdrops.

The Release is interpretive and therefore does not create new law or safe harbors and does not bind courts. It reflects how the SEC intends to apply existing law, including in enforcement actions. Given the Supreme Court’s decision in Loper Bright, which requires courts to review agency actions de novo and without deference, and existing federal court precedent applying the framework established in SEC v. W.J. Howey Co., 328 U.S. 293 (1946), to determine whether digital assets constitute investment contracts, it remains to be seen how this guidance will impact digital asset litigation more broadly.

Key Takeaways

• SEC-level interpretation. The Release reflects the views of the SEC, with the CFTC indicating that it will apply a consistent approach under the Commodity Exchange Act. It is intended to guide how the agencies administer existing law.
• Structured taxonomy and transaction-focused analysis. The SEC groups crypto assets into categories—digital commodities, digital collectibles, digital tools, stablecoins, and digital securities—and distinguishes between whether an asset is itself a security and whether transactions involving that asset may constitute an investment contract.
• Issuer conduct remains central. Consistent with Howey, the analysis focuses on whether purchasers are led to expect profits derived from the efforts of others, particularly through issuer representations and undertakings and when those representations and undertakings are made relative to any transaction involving a digital asset.
• Guidance on recurring activities. The Release addresses staking, mining, wrapping, staking receipt tokens, and airdrops, concluding that these activities generally do not involve securities transactions in the specific circumstances described in the Release.
• However, the Release notes that non-security digital assets distributed via airdrop may be subject to an investment contract in secondary exchanges if the issuer distributes the same digital asset via investment contract in proximity to the airdrop.
• “Separation” concept. A crypto asset may be sold as part of an investment contract but may cease to be subject to one if reliance on managerial efforts dissipates.
• Issuers may undertake efforts to dissipate such reliance or set terms for such reliance preemptively.
• Litigation risk remains notwithstanding the guidance. The Release reflects the agencies’ interpretive views and enforcement posture but does not bind courts or state regulators. Absent congressional action codifying the guidance, or otherwise establishing statutory parameters around digital assets, courts are likely to continue to apply Howey to determine if digital assets are securities and litigation outcomes will remain fact-specific.

A Functional Taxonomy of Crypto Assets

The Release groups crypto assets into five functional categories based on their characteristics and use:

• Digital commodities—Assets associated with decentralized network operation (e.g., Bitcoin); presumptively not securities.
• Digital collectibles—Assets acquired for artistic, cultural, or entertainment purposes; not securities absent additional features.
• Digital tools—Tokens with consumptive or functional utility (e.g., access or governance); presumptively not securities.
• Stablecoins—Cryptocurrency with treatment that depends on structure; certain payment stablecoins may fall outside the securities laws, while others require a facts-and-circumstances analysis.
• Digital securities—Tokenized traditional securities or instruments that otherwise meet the definition of a security.

The categorization is descriptive rather than dispositive. Application of the securities laws continues to depend on the facts of the asset and the surrounding transaction.

Investment Contract Analysis: Focus on Issuer Conduct

The Release reaffirms that Howey governs whether a transaction involves a security. The inquiry turns on whether purchasers are led to expect profits derived from the efforts of others, which the Release highlights must be “essential managerial efforts.”

The SEC emphasizes issuer conduct, including:

• The content of communications (e.g., whitepapers, marketing materials, social media);
• The specificity of development plans or promised efforts;
• The timing of representations (at or before sale); and
• Whether statements are attributable to the issuer or its agents.

General market speculation or third-party commentary, without issuer involvement or attribution, is not sufficient.

The analysis also distinguishes between the crypto asset and the transaction. A non-security crypto asset may be sold as part of an investment contract without the asset itself becoming a security.

Lifecycle Concept: Potential Separation from an Investment Contract

The Release explains that a crypto asset sold as part of an investment contract may, over time, cease to be associated with that investment contract (become “separate”) based on changes in the relevant facts and circumstances.

This may occur where:

• The issuer’s promised managerial efforts have been fulfilled; or
• Purchasers no longer reasonably expect those efforts to occur.

The Release notes that this concept does not affect potential liability for prior offers or sales.

Application to Common Crypto Activities

The Release provides the SEC’s views on several recurring activities:

• Mining and staking. Validation-related activities generally do not involve securities transactions where rewards are tied to network participation rather than managerial efforts of others.
• Staking arrangements. Certain delegated, custodial, and liquid staking arrangements are addressed, with conclusions limited to the structures described.
• Staking receipt tokens and wrapped tokens. Tokens are not securities where they function as 1:1 representations of underlying non-security assets and do not introduce additional economic rights or profit expectations.
• Airdrops. Distributions without consideration generally do not satisfy Howey’s “investment of money” element.

Each conclusion is conditioned on the facts described.

Litigation Risk Remains Notwithstanding the Guidance

Despite the SEC’s and CFTC’s guidance, absent congressional action to codify a digital asset framework, uncertainties remain. Since Judge Castel of the U.S. District Court for the Southern District of New York granted a preliminary injunction in 2020 to enjoin Telegram from distributing cryptocurrency based on an application of the test developed by the Supreme Court in SEC v. W. J. Howey Co., numerous federal and state courts have applied the Howey test and concluded that both primary and secondary digital asset offerings are securities. [1] Indeed, the guidance itself acknowledges that Howey is binding legal precedent. The Supreme Court’s 2024 decision in Loper Bright Enters. v. Raimondo, 603 U.S. 369 (2024), which struck down “Chevron” deference or the principle that courts should defer to reasonable agency interpretations of the law, means courts faced with the question of whether a digital asset is a security need not defer to SEC and CFTC guidance and must independently interpret the law, including existing court opinions.

Absent congressional action establishing a broader digital-asset framework, the application of the securities laws to digital assets will continue to develop through case-by-case judicial analysis.

Implications

The Release provides a more structured and transparent articulation of how the SEC and CFTC analyze crypto assets under existing law and offers insights into likely enforcement approaches.

It does not eliminate the need for fact-specific analysis. Market participants should continue to evaluate digital asset offerings and transactions under Howey and related precedent and should not assume that alignment with the Release is dispositive in a judicial context.

Conclusion

The 2026 interpretive release clarifies agency perspective and provides a more structured analytical framework. However, it does not alter the governing legal standard or resolve the fact-specific and evolving nature of judicial analysis in this area. Until Congress enacts a comprehensive digital asset framework, market participants should expect continued uncertainty and fact-specific litigation outcomes.

[1] See, e.g., SEC v. Telegram Grp. Inc., 448 F. Supp. 3d 352, 369–70 (S.D.N.Y. 2020) (granting preliminary injunction and finding that the distribution of Grams cryptocurrency constituted unregistered securities offerings under Howey); SEC v. Kik Interactive Inc., 492 F. Supp. 3d 169, 179–80 (S.D.N.Y. 2020) (granting summary judgment for the SEC and holding that Kik’s token sale was an investment contract); SEC v. Terraform Labs Pte. Ltd., 708 F. Supp. 3d 450, 472–74 (S.D.N.Y. 2023) (granting summary judgment for the SEC on unregistered offer-and-sale claims and finding defendants offered crypto assets as investment contracts); but see SEC v. Ripple Labs, Inc., 682 F. Supp. 3d 308, 328–30 (S.D.N.Y. 2023) (holding that institutional sales of XRP were investment contracts, but programmatic secondary-market sales on exchanges were not).