The SEC has filed a legal framework to apply securities laws to crypto

Realizing cryptocurrency assets?

The U.S. Securities and Exchange Commission (SEC) has formally submitted a detailed regulatory framework proposal to the White House, outlining how existing federal securities laws would apply to digital assets, according to multiple reports citing sources familiar with the matter.

This document is understood to be a policy plan hundreds of pages long, addressing token classification, registration requirements, custody standards, disclosure obligations, and enforcement priorities in the cryptocurrency space.

This filing follows months of internal discussions at the SEC under Chairman Paul Atkins and amid renewed momentum toward clearer regulations in the second Trump administration.

It has not yet been made public and is expected to serve as the basis for potential executive actions, legislation (possibly through the CLARITY Act or similar), or updated SEC regulations/guidance.

Are cryptocurrency tokens considered securities?

At the heart of the debate is whether certain cryptocurrencies fall under the definition of securities under U.S. law. The U.S. Securities and Exchange Commission (SEC) has historically relied on the Howey Test, a legal standard used to determine whether an asset qualifies as an investment contract.

Under this framework, a token can be considered a security if:

• Investors contribute money.

• The funds are pooled into a single business.

• Investors expect returns.

• Those profits depend primarily on the efforts of others.

Many token issuances in the cryptocurrency industry have the potential to meet these criteria, which has led the SEC to take enforcement action against several projects in recent years.

Balancing Innovation and Investor Protection

The SEC's (U.S. Securities and Exchange Commission) approach attempts to balance two conflicting priorities. On the one hand, regulators aim to protect investors from fraud, manipulation, and unregistered securities offerings. On the other hand, policymakers also want to ensure that regulatory pressure does not drive innovation and capital out of the United States.

The cryptocurrency industry frequently criticizes regulators for relying too heavily on enforcement actions instead of establishing clear rules from the outset.

If this framework leads to new guidance or legislation on regulation, it could significantly reshape the US cryptocurrency market. Exchanges may need to register under securities laws if they list tokens classified as securities.

Token issuance projects may also be subject to stricter disclosure and registration requirements, similar to those applied to traditional securities offerings.

This could increase compliance costs but could also strengthen investor confidence in regulated digital asset markets.

Our review

The submission of this legal framework could be considered the most significant document on cryptocurrency regulation in the U.S. since the wave of enforcement in 2021-2022. While it won't immediately change the law, it lays the theoretical and policy foundation for what could become the definitive U.S. stance on applying securities laws to digital assets. If the White House and Congress act decisively, 2026 could mark the year that cryptocurrencies finally receive the legal clarity the industry has been demanding for nearly a decade. Right now, all eyes are on Washington — and any early leaks or signals from the White House in the coming days.

Disclaimer: The information presented in this article is the author's personal opinion in the field of cryptocurrency. This is not financial or investment advice. All investment decisions should be based on careful consideration of your personal portfolio and risk tolerance. The views expressed in this article do not represent the official stance of the platform. We recommend that readers conduct their own research and consult with experts before making any investment decisions.

Compiled and analyzed by HCCVenture

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