SEC & CFTC Finalize Landmark Rule Classifying Bitcoin, Ethereum, XRP and Others as Digital Commodities

The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have issued a landmark joint rule establishing a clear classification framework for crypto assets, officially designating major tokens like Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Hedera (HBAR) as digital commodities—not securities.

This long-awaited move provides the clearest regulatory guidance to date and marks a major shift in how digital assets are treated under U.S. law.

A New “Token Taxonomy” for Crypto

The rule introduces a formal classification system—often referred to as a token taxonomy—that separates crypto assets into distinct categories.

Under this framework:

• Digital commodities → BTC, ETH, XRP, SOL, HBAR, and similar assets

• Digital tools & utility tokens → governance and access tokens

• Digital collectibles → NFTs

• Digital securities → tokenized stocks, bonds, and similar instruments

Only digital securities fall under SEC jurisdiction, while most crypto assets are now primarily overseen by the CFTC.

Major Cryptos Officially Not Securities

The rule explicitly confirms that the following 17 cryptocurrencies are classified as digital commodities and not securities:

• Bitcoin (BTC)

• Ethereum (ETH)

• XRP

• Solana (SOL)

• Hedera (HBAR)

• Cardano (ADA)

• Avalanche (AVAX)

• Polkadot (DOT)

• Chainlink (LINK)

• Stellar (XLM)

• Litecoin (LTC)

• Bitcoin Cash (BCH)

• Dogecoin (DOGE)

• Shiba Inu (SHIB)

• Sui (SUI)

• Cosmos (ATOM)

• Algorand (ALGO)

This designation removes a major legal overhang that has historically created uncertainty for exchanges, developers, and institutional investors.

CFTC Takes the Lead

With most crypto assets now categorized as commodities, the CFTC will take primary regulatory authority over spot markets, trading activity, and derivatives tied to these assets.

This shift reflects a broader policy direction in Washington:

• The SEC focuses on investor protection and securities markets

• The CFTC oversees commodity markets and trading infrastructure

The coordinated approach is designed to eliminate regulatory overlap and confusion that has slowed innovation in the U.S. crypto industry.

What Still Counts as a Security

Despite the broader reclassification, some crypto-related assets will still fall under securities laws.

These include:

• Tokenized stocks and bonds

• Certain investment contracts tied to crypto projects

• Assets marketed with profit expectations tied to centralized issuers

This ensures that traditional financial instruments—even when placed on blockchain—remain subject to strict regulatory oversight.

Why This Matters

This joint SEC-CFTC rule is one of the most important regulatory developments in crypto history.

It effectively:

• Ends years of uncertainty around whether major cryptocurrencies are securities

• Establishes a clear division of regulatory authority in the U.S.

• Opens the door for institutional capital to enter the market with more confidence

• Positions the U.S. to compete globally in digital asset innovation

Most importantly, it signals a fundamental shift:
Crypto is no longer being forced into traditional financial definitions—regulators are now building frameworks around it.