SEC submits framework to White House on applying securities laws to crypto assets

The U.S. Securities and Exchange Commission has submitted commission-level interpretive guidance to the White House on how federal securities laws could be applied to cryptocurrencies.

The guidance, titled "Commission Interpretation on Application of the Federal Securities Laws to Certain Types of Crypto Assets and Certain Transactions Involving Crypto Assets," was submitted on March 3 and is currently at the prerule stage undergoing interagency review. 

While the White House's Office of Information and Regulatory Affairs (OIRA) provides limited details about the interpretation on its website, Bloomberg reported that it likely focuses on establishing "token taxonomy" — a framework for categorizing crypto assets to determine which fall under SEC jurisdiction as securities and which may be treated differently.

Such jurisdictional clarity would affect how crypto firms register with regulators, fulfill disclosure requirements, conduct operations, and engage with investors. According to Bloomberg, such commission-level guidance does not require a commission vote and is generally viewed to be more enforceable when compared to staff-level statements.

Since the beginning of his term, SEC Chairman Paul Atkins has emphasized digital asset regulation as a priority, saying he prefers congressional legislation but noting the agency could proceed independently if necessary. 

A bill aimed at establishing a crypto market structure framework stalled in the Senate this year, partly due to disputes between banks and crypto firms over stablecoin rewards. The White House has been hosting meetings between banking and crypto representatives to resolve the issue.

Prediction Markets

Separately, the Commodity Futures Trading Commission submitted a measure on prediction markets to OIRA on Monday. 

The move aligns with CFTC Chairman Michael Selig's Tuesday speech at the Milken Institute's Future of Finance event, where he said the agency plans to move forward with an advanced notice of proposed rulemaking on prediction markets in the near future.

"We're going to be setting very clear standards as to what can be self-certified in our markets and what cannot and how to evaluate the different products that are offered in the space," Selig said.

Through the upcoming rulemaking, the CFTC aims to address discrepancies between federal and state interpretations of prediction markets, especially their sports-related event contract markets. Multiple states have issued enforcement actions against platforms like Kalshi and Polymarket, arguing that they violated state gaming and gambling laws.

"What we're doing for these markets, beyond getting involved in the litigation, is setting clear rules and regulations," Selig said on Tuesday. "We are going out with guidance in the very near future, so please stay tuned."