The United States Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have jointly published new guidance establishing a formal taxonomy for digital assets. According to Alex Thorn, head of firmwide research at Galaxy Digital, this move effectively marks the end of the regulatory approach championed by former SEC Chairman Gary Gensler.
A New Taxonomy for Digital Assets
The guidance, released on Tuesday, categorizes digital assets into five distinct groups: digital commodities (like Bitcoin), digital collectibles (such as non-fungible tokens or NFTs), digital tools (including certain utility tokens), stablecoins, and tokenized securities. This framework is designed to provide clearer regulatory boundaries between the agencies’ jurisdictions.
The SEC guidance published on Tuesday establishes which digital assets qualify as securities. Source: SEC
Interpretive Rule vs. Legislative Rule: Why It Matters
Thorn highlights a critical legal distinction in how this new guidance was issued. Under the previous SEC framework, the determination of which cryptocurrencies constituted “investment contracts” (and thus securities) was treated as a legislative or substantive rule. The new 2026 guidance, however, was filed as an interpretive rule.
This difference is significant under the Administrative Procedure Act (APA). A legislative rule requires notice-and-comment rulemaking, carries the force of law, and legally binds both the agency and regulated entities. An interpretive rule bypasses those requirements, does not have the force of law, and merely articulates the agency’s current understanding of existing statutes.
“An interpretive rule is exempt from notice-and-comment requirements, does not have the force of law, and merely explains how the agency understands existing statutory provisions,” Thorn explained. Consequently, this interpretive approach does not legally bind courts, offering both the SEC and the crypto industry greater flexibility to adapt to future legal or political shifts.
The Path Forward: CLARITY Act and Industry Concerns
Thorn states that the new interpretive guidance provides the crypto industry with much-needed regulatory clarity for the next 30 months. However, he cautions that for long-term certainty spanning decades, the CLARITY Act—a bipartisan legislative proposal to codify digital asset market structure—must be enacted into law.
The CLARITY Act stalled in January 2025 following substantial industry opposition. Key concerns raised by Coinbase and other stakeholders included a proposed prohibition on generating yield from stablecoin “passive balances” and insufficient protections for open-source software developers. Furthermore, provisions perceived to impose traditional financial reporting and know-your-customer (KYC) requirements on decentralized finance (DeFi) protocols were cited as a primary reason for contention, with critics arguing such rules could cripple the DeFi sector.
Source: Jake Chervinsky (via CoinDesk reporting)
Tentative Deal Emerges for CLARITY Act
On Friday, Politico reported a potential breakthrough, citing a tentative deal between the White House and key lawmakers to advance the CLARITY bill. Specific terms of the agreement remain undisclosed. Senator Angela Alsobrooks indicated the tentative framework includes a ban on stablecoin yield specifically from “passive balances,” a refinement of the previously controversial provision.
This development suggests a renewed, albeit fragile, negotiation to address the industry’s structural concerns while moving toward a statutory framework.
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