US SEC hands off to White House review proposed criteria to exclude crypto assets from 'securities'…a pivotal moment for regulatory shift

The US Securities and Exchange Commission (SEC) has sent to the White House a proposed interpretive guidance that would move toward treating a substantial share of virtual assets (cryptocurrencies) as not being securities, accelerating changes to the regulatory framework.

According to Cointelegraph on the 23rd (local time), the SEC recently submitted to the White House Office of Management and Budget (OMB) an interpretive proposal that would redefine whether digital assets qualify as securities. The item is currently listed as “pending review,” and if approved is expected to mark an important inflection point in the direction of crypto regulation.

In the proposal, the SEC set out criteria under which four categories of assets—digital commodities, digital instruments, digital collectibles such as non-fungible tokens (NFTs), and stablecoins—would in principle not be treated as securities. Through this, it aims to establish a “token taxonomy” that classifies virtual assets by type.

The criteria also present a framework for determining when, in certain cases, a specific asset could be deemed an investment contract, and are expected to help partially address regulatory gaps for non-security crypto assets.

The SEC’s move has a strong interim-regulation character that would apply until Congress passes comprehensive crypto legislation. Previously, the SEC had been preparing for a future division of regulatory authority by building a cooperative framework with the Commodity Futures Trading Commission (CFTC).

Meanwhile, the White House and Congress have narrowed some differences over the issue of interest payments on stablecoins, continuing discussions on the market-structure bill known as the “CLARITY Act.” However, the bill’s schedule for Senate deliberation has yet to be finalized.