On January 15, 2025, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) published a joint memorandum that ends years of uncertainty in crypto regulation. For the first time since the emergence of digital assets, the two U.S. regulatory authorities agree on a clear dividing line: which digital assets fall under securities classification, and which do not.
This clarification is more than a matter of administrative terminology. It concretely redefines which assets can circulate freely on exchange platforms, which require prior registration, and most importantly: what protections apply to investors based on the regulatory nature of their digital holdings. In a context where securing digital assets becomes a priority, understanding the regulatory status of your crypto proves indispensable.
The context of a seven-year regulatory battle
Since 2017 and the SEC's DAO report, the question of the regulatory status of digital assets has poisoned relations between the industry and U.S. regulators. The SEC applied the Howey test, inherited from a 1946 Supreme Court ruling, to classify any digital asset sold with a promise of profit derived from a third party's efforts as a security. Result: according to the SEC, virtually all tokens fell under its jurisdiction.
The CFTC, meanwhile, defended a more restrictive view. For it, Bitcoin and Ethereum constitute commodities—digital raw materials—just like gold or oil. This divergence in interpretation placed exchange platforms in an untenable legal situation: how do you list an asset when two different regulators claim authority over it?
The January 15, 2025 memorandum finally settles the debate. It establishes three distinct categories, each with radically different regulatory consequences.
The three categories that now structure the crypto market
The text first identifies pure commodity digital assets. Bitcoin tops the list, alongside Ethereum since its transition to proof-of-stake. These assets have three cumulative characteristics: demonstrated decentralization of governance, absence of an identifiable issuer capable of influencing valuation, and primary use as a store of value or means of exchange. For these assets, the CFTC exercises exclusive jurisdiction over derivatives markets, while spot transactions remain largely unregulated at the federal level.
The second category groups hybrid tokens. These are assets that, while decentralized in their technical operation, retain a link with a promotional entity or foundation that orchestrates development. The memorandum explicitly cites Cardano and Polkadot as examples. These assets fall under shared jurisdiction: the SEC retains its authority over the initial offering and any promotional communication from the issuing entity, while the CFTC supervises derivatives markets once the asset is sufficiently distributed.
Finally, security tokens remain entirely under SEC authority. This category encompasses all assets issued by an identifiable company, backed by economic rights (dividends, revenue shares, voting rights), or marketed with an explicit promise of return. The Howey test continues to apply fully to this category, with all the registration and reporting obligations that entails.
The criterion of effective decentralization according to the SEC and CFTC
The true innovation of the memorandum lies in the operational definition of decentralization. Regulators now refuse to settle for technical decentralization alone—the fact that a network operates on a public blockchain is no longer sufficient. They demand economic and decisional decentralization.
Concretely, an asset can claim commodity status only if no single entity holds more than 20% of the circulating supply, if governance decisions are made through verifiable on-chain decentralized voting, and if no foundation or company actively finances campaigns to promote the asset. This last point represents a notable tightening: even a technologically decentralized project can shift into the securities category if its founding team continues to publicly promise increases in valuation.
Immediate consequences for platforms and investors
U.S. exchange platforms have 180 days to bring their offerings into compliance. Coinbase, Kraken, and Gemini have already announced the withdrawal of several dozen tokens classified as unregistered securities. Conversely, assets recognized as pure commodities enjoy easier access: platforms can now list them without seeking prior authorization from the SEC.
For investors, the clarification substantially modifies the level of regulatory protection. Holders of security tokens benefit from the full arsenal of securities law: periodic disclosure obligations from the issuer, insider trading prohibitions, remedies in case of market manipulation. These protections do not apply to pure commodities, where the investor bears the full market risk without regulatory safeguards.
This distinction is not neutral. In October 2024, the Terraform Labs case demonstrated the limits of investor protection for unregistered assets: despite an estimated loss of $40 billion, LUNA holders could only obtain compensation through an exceptionally lengthy criminal procedure. Had LUNA been registered as a security token, indemnification mechanisms would have kicked in far more quickly.
A point of caution
An asset's classification is not permanently fixed. The memorandum explicitly clarifies that a token can migrate from one category to another based on changes in its governance and distribution. An asset initially qualified as a security can shift to commodity status if the issuer genuinely withdraws and decentralization becomes real. Conversely, recentralization—for instance through the foundation's massive token buybacks—can cause it to lose that status. Periodically verify the regulatory classification of your assets, as it determines your legal protections in case of dispute.
The impact on European investors and MiCA convergence
The European regulation on crypto-asset markets (MiCA), which came into force on December 30, 2024, adopts a partially different approach. MiCA distinguishes four categories: electronic money tokens (EMT), asset-referenced tokens (ART), utility tokens, and crypto-assets not covered by the first three categories. This latter catch-all category poses a problem: it encompasses both Bitcoin and a multitude of governance tokens whose regulatory status remains unclear.
The U.S. clarification could accelerate transatlantic convergence. The European Securities and Markets Authority (ESMA) has already announced that it will publish guidance before end of March 2025 on the distinction between utility tokens and financial instruments under MiFID II. This guidance should largely be inspired by the SEC-CFTC framework, particularly on the criterion of effective decentralization.
For French investors holding assets on U.S. platforms, the situation becomes more complex. An asset qualified as a commodity in the United States but as a financial instrument in Europe generates different tax and disclosure obligations. Article 150 VH bis of the French General Tax Code requires the reporting of capital gains on all digital assets, regardless of their regulatory classification, but the taxation regime differs depending on whether the asset is considered movable property or a financial instrument. Before any significant cross-border transaction, consult a specialized accountant.
What concretely changes in your investment decisions
The regulatory clarification modifies the due diligence criteria that every serious investor must apply before acquiring a digital asset. Here are the control points now essential.
First, verify the official regulatory category. The CFTC maintains an updated list of assets recognized as commodities on its institutional website (cftc.gov/DigitalAssets). The SEC separately publishes the list of tokens that have undergone registration as securities. Any asset absent from both lists likely falls into the hybrid category, with the uncertainties that entails.
Second, analyze the actual governance structure, not what is proclaimed in the whitepaper. Several on-chain tools now allow verification of actual token distribution: Nansen, Glassnode, and Dune Analytics offer dashboards detailing asset concentration and top holder activity. If you find that a single address controls more than 20% of the supply, or that governance votes are systematically dominated by the same entity, consider the asset to remain centralized regardless of marketing claims.
Third, identify the issuer or foundation and audit its communications. The line between legitimate information and unlawful promotion remains thin. According to the SEC-CFTC memorandum, a foundation can legally fund the technical development of a protocol without reclassifying the asset as a security. However, once it starts disseminating valuation projections, organizing investor roadshows, or paying influencers to promote the asset, it shifts the token into the unregistered securities category—with the risk of an SEC enforcement action.
Checklist before any significant crypto investment
- Verify the asset's presence on official CFTC or SEC lists
- Check token distribution via Nansen or Glassnode (maximum concentration 20%)
- Analyze on-chain governance voting history (verify effective decentralization)
- Audit the foundation's or issuer's communications over 12 months (presence of return promises?)
- Identify exchange platforms where the asset is listed (regulated U.S. platforms have already conducted their own due diligence)
- For amounts exceeding €50,000: seek advice from specialized legal counsel on regulatory classification in your jurisdiction
Perspective: toward global harmonization or increased fragmentation?
The SEC-CFTC clarification marks a turning point, but it also opens a period of uncertainty for transnational projects. An asset can now be assigned different regulatory statuses depending on jurisdiction: commodity in the United States, utility token in Europe, security token in the United Kingdom. This regulatory fragmentation creates arbitrage opportunities—offshore platforms already offer differentiated services based on investor tax residency—but it considerably complicates portfolio management for multinational investors.
The stakes go beyond simple administrative compliance. They touch the core of decentralized finance's economic model: can you truly build global, borderless financial protocols when each regulator imposes its own framework? The answer is gradually becoming clear. The most structured projects now adopt a regulation-first approach: they design their legal architecture and governance by anticipating the requirements of major regulators, even if it means limiting certain functionalities to guarantee compliance.
This pragmatic approach could accelerate sector maturation. The assets that survive regulatory clarification will be those that have demonstrated real decentralization, tangible economic utility, and transparent governance. For investors seeking to generate returns on their digital assets, this means a progressively cleansed market where regulatory protections finally align with the real economic nature of the assets held. But it also means heightened vigilance: the transition period exposes certain risks, particularly for assets whose categorization remains contested between regulators.
The January 15, 2025 clarification is not an endpoint. It is the beginning of a profound reshaping of the digital asset market, where regulatory compliance becomes a competitive advantage and where informed investors finally have the tools to precisely evaluate the protections they benefit from.
