SEC and CFTC regulatory alignment on crypto asset classification

The SEC and CFTC issued a joint interpretive release on March 17, 2026, that classifies 16 major crypto assets, including Bitcoin, Ethereum, Solana, and XRP, as digital commodities under federal law to end a decade of regulatory uncertainty. This framework establishes five distinct categories: digital commodities, digital tools, digital collectibles, stablecoins, and digital securities. The document separates a token’s inherent classification from the manner in which an entity sells or promotes it. If a project reaches sufficient decentralization, the token status reverts to its non-security status. The agencies use the Howey test with refined criteria to see if buyers expect profits from a common enterprise. The SEC specifically named Aptos, Avalanche, Bitcoin, Bitcoin Cash, Cardano, Chainlink, Dogecoin, and Ether in the release. The guidance also clarifies that staking is an "administrative task" for network security rather than a securities offering. For airdrops, the guidance focuses on whether a free token distribution involves an "investment of money" or a "common enterprise." This agreement supersedes an earlier 2018 coordination pact. The new memorandum of understanding facilitates data sharing and advance notification of enforcement actions.

The commodity classification framework

The March 2026 framework clearly separates decentralized protocol staking from centralized services. Protocol staking, where the user retains control and rewards result from network consensus, remains outside SEC jurisdiction. This includes self-staking, self-custodial delegation, and non-discretionary liquid staking. Centralized services that manage asset allocation or promise fixed yields still look like investment contracts. BlackRock launched the iShares Staked Ethereum Trust (ETHB) on March 12, 2026, to provide institutional access to these rewards. ETHB holds spot ETH on-chain and uses providers like Coinbase Prime, Figment, and Galaxy Digital to operate validators. BlackRock does not run validator infrastructure directly.

Maryland’s SB305 treats certain staking arrangements as securities and issued at least one cease-and-desist against a provider. This state-level restriction means federal clarity does not remove all compliance burdens for firms. You should note that Maryland’s rules were effective from December 2025 through June 2026.

The regulatory alignment favors the CFTC’s oversight of digital commodities

CFTC Chairman Rostin Behnam told the Senate Agriculture Committee that Ethereum is a commodity. He argued that the CFTC is the correct authority to police its derivatives and underlying markets. This stance contradicts the SEC’s position that all assets except Bitcoin are securities. The SEC continues to investigate centralized products, such as the Coinbase probe into staking services. The SEC’s Division of Enforcement under Director David Woodcock prioritizes fraud and manipulation over volume-driven enforcement strategies. In the first half of 2026, the SEC announced 122 enforcement actions, which is fewer than the 146 actions in the first half of 2025. The Division focuses on core issues like accounting fraud, insider trading, breaches of fiduciary duty, and consumer-facing fraud. For FY 2025, the Commission reported $17.9 billion in monetary relief, including $10.8 billion in disgorgement. The SEC and CFTC have also conducted 27 coordinated investigations. Does the SEC’s focus on quality over quantity leave room for larger market manipulation?