Treat most digital assets as commodities rather than securities
What the document says“Otherwise, the digital asset shall be deemed a commodity to be regulated by the CFTC, not the SEC.”
The part proposes a joint regulation under which a digital asset holder is not treated as party to an investment contract unless entitled to a share of earnings, a defined flow of payments, or rights against assets on liquidation. It says both agencies have been irresponsible in this area, choosing regulation by enforcement and doing it poorly, and that Congress should legislate if they do not act.
What the document actually says“Otherwise, the digital asset shall be deemed a commodity to be regulated by the CFTC, not the SEC.”
If not, the token counts as a good. A different agency would watch it.
Crypto tokens are regulated, but it is unclear by whom. The book sets a test. Most tokens would fall to the commodities agency.
Strengthening American Leadership in Digital Financial Technology
2025-01-23 · 90 FR 8647
Executive Order 14178 of January 23, 2025 takes up the same question by a different route. It makes regulatory clarity and well defined jurisdictional regulatory boundaries a stated policy, revokes the prior digital asset order, and creates a working group that includes both the Chairman of the Securities and Exchange Commission and the Chairman of the Commodity Futures Trading Commission, directing it to propose within 180 days a federal regulatory framework for digital assets covering market structure and oversight. It stops short of what the proposal asks: it adopts no test for when a holder is party to an investment contract, deems no asset a commodity, assigns nothing to the Commodity Futures Trading Commission, and issues no joint regulation, leaving the line between the two agencies where it was and only commissioning recommendations about it.
The order takes up the same question by a new route. It calls for clear lines between agencies and pulls the older order on digital assets. It sets up a work group with both market agencies on it. That group had 180 days to propose a set of rules. But no asset is called a commodity. Nothing is handed to either agency, so the old line stands.
1 agency rule
- Withdrawal of Interpretive Guidance: Retail Commodity Transactions Involving Certain Digital AssetsCommodity Futures Trading Commission · December 16, 2025
Each of these names the order above in its own summary, preamble or filing. That is a fact about the document, not a finding that it carries out this proposal: it is one step further away than the order is, and what it does about the proposal is a reading nobody has made here.