On March 17, 2026, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) jointly released Interpretive Release No. 33-11412, officially announcing a 68-page regulatory framework: U.S. crypto regulation bids farewell to a decade of “regulation by enforcement” and enters a new era of clarity and harmony driven by “Project Crypto.” This document is not only a rare regulatory collaboration between the SEC and CFTC, but also the most landmark guidance document in the history of U.S. crypto regulation.

I. Background: “Project Crypto” from Conflict to Collaboration
In 2017, the SEC first applied the Howey Test to crypto assets through “The DAO Report.” In the following decade, regulation mainly relied on enforcement actions to define asset attributes, and the market was in a long-term state of uncertainty and controversy. In early 2025, the SEC established the “Crypto Task Force,” followed by the launch of the “Project Crypto” initiative jointly led by SEC Chairman Paul S. Atkins and CFTC Chairman Michael S. Selig, aimed at coordinating the powers of the two regulatory agencies, establishing a unified asset classification, and providing a clear path for crypto innovation to remain in the United States. In January 2026, the project was officially upgraded to a joint action by the SEC and CFTC.

II. Asset Classification: The “Five-Category Method” Logic of Crypto Assets
Based on asset characteristics, uses, and functions, the document divides crypto assets into five major categories, providing the market with clear classification standards for the first time:

Digital Commodities: Refers to assets whose value originates from the programmatic operation and supply-demand dynamics of a “functional” crypto system, rather than relying on the management efforts of others. The document explicitly names mainstream tokens such as BTC, ETH, SOL, XRP, ADA, DOT, AVAX, and LINK as digital commodities.
Digital Securities: Namely “tokenized securities,” refers to traditional securities represented in the form of crypto assets, or digital assets with securities economic substance (such as representing corporate ownership and dividend rights). Whether on-chain or off-chain, as long as it meets the economic substance, it falls under the regulatory scope of the SEC.
Regulated Payment Stablecoins: Stablecoins that meet the definition of the 2025 “GENIUS Act” and are issued by permitted institutions are explicitly excluded from the definition of “securities” and are mainly subject to specific legal constraints as payment tools.
Digital Tools: Tokens that only have practical functions within a specific crypto system (such as access rights or service payments) are generally not considered securities.
Digital Collectibles: Assets intended to be collected and/or used, representing artworks, music, videos, in-game items, or internet memes (such as CryptoPunks, Chromie Squiggles, WIF, VCOIN, etc.). They are not securities in themselves, but may constitute securities if they are fragmented and sold.

III. Innovation: “Stripping” and “Dynamic Conversion” of Securities Attributes
This is the most groundbreaking legal innovation in the document—the SEC acknowledges for the first time that the “securities attribute” of crypto assets is not permanent. The principle of the “Separation” mechanism is that a project may be considered a security because it meets the Howey Test in the early stages of financing, but when the project completes its roadmap, achieves autonomous operation of open-source code, and decentralizes network power, the asset can be “stripped” from the investment contract. The criterion for judgment is that when investors no longer reasonably rely on the “core management efforts” of the issuer to obtain profits, but rely on the operation of the system itself and market supply and demand, the asset changes from a “security” to a “digital commodity.”

IV. Qualitative Analysis of On-Chain Activities: “Clearing Mines” for Decentralization
For long-standing controversial activities such as staking, mining, wrapping, and airdrops, the document provides extremely detailed and favorable explanations:

Protocol Mining: Whether it is solo mining or joining a mining pool, it does not involve the issuance of securities.
Protocol Staking: Including solo staking, entrusting third-party staking, custodial staking, liquidity staking, etc., as long as it does not involve secondary lending of assets, leverage, or discretionary transactions, it does not constitute securities activities.
Staking Receipt Tokens: If the underlying asset is a non-security commodity, the voucher itself is not a security and exists only as a “receipt.”
Wrapping: If the underlying asset is a non-security commodity and the custodian locks the asset without lending it out, the wrapped token belongs to an “administrative function” and does not constitute a securities transaction.
Airdrops: As long as the recipient does not provide money, goods, services, or other consideration, it does not meet the “investment of money” element in the Howey Test. However, if the recipient needs to provide services (such as social media promotion) in exchange for the airdrop, it may constitute a securities issuance.

V. Consolidation of U.S. Leadership
The document analyzes its economic significance in detail at the end: eliminating the “chilling effect,” reducing compliance costs, enhancing market transparency, promoting competition and innovation, and improving pricing efficiency. By providing legal clarity, it reduces business stagnation caused by opaque compliance and encourages crypto innovation to return to the United States.

VI. Historic Breakthrough in Regulatory Collaboration
From a structural point of view, the document establishes a clear analysis path: first classify assets, then judge the transaction structure, and finally analyze whether the investment relationship continues to exist. More importantly, this is a rare coordination result between the SEC and CFTC on crypto regulatory issues. This joint framework essentially makes a preliminary division of the attribution of major asset classes, marking the formal transition of U.S. crypto regulation from the “institutional power competition” stage to a “division of labor system based on unified rules.” This 68-page document not only ends a decade of regulatory chaos, but also establishes the United States’ leadership in the global crypto regulatory field. For practitioners, this is a must-read “industry constitution.”

RichSilo Exclusive Analysis:

Regulatory Revolution: How the U.S. “Five-Category Law” Reshapes Crypto Markets

The U.S. crypto landscape has undergone a seismic shift with the joint SEC-CFTC release of Interpretive Release No. 33-11412, marking the end of a decade of regulatory uncertainty and the dawn of structured oversight. This 68-page framework, dubbed “Project Crypto,” represents not merely regulatory guidance but a foundational reordering of the digital asset ecosystem in the United States. For sophisticated investors, this isn’t just a compliance document—it’s the new constitution of American crypto markets.

Market Impact: Immediate and Transformative

The most immediate market impact will be the reclassification and subsequent repricing of assets based on their newly assigned categories. The explicit designation of BTC, ETH, SOL, XRP, ADA, DOT, AVAX, and LINK as “digital commodities” removes existential regulatory risk from these major assets. This classification effectively immunizes them from SEC securities enforcement actions, a paradigm shift that will fundamentally alter risk assessments for institutional portfolios.

The market is likely to experience a structural reorientation around these commodity classifications. We anticipate a significant reduction in the regulatory premium previously baked into the prices of these assets—particularly for those like XRP that endured prolonged legal battles. Expect volatility patterns to change as these assets begin to trade more like commodities than speculative securities.

The “Separation” mechanism represents perhaps the most groundbreaking legal innovation in crypto regulation. The acknowledgment that securities attributes aren’t permanent will unlock immense value for protocols that successfully transition from centralized management to decentralized operation. Projects with clear, achievable roadmaps to decentralization should see their valuation multiples expand as the market prices in their eventual commodity status.

Asset-Specific Revaluations

Digital Commodities (BTC, ETH, SOL, etc.)

This category represents the clear winners in this regulatory framework. The explicit naming of eight major tokens as commodities provides regulatory certainty that was previously unimaginable. We expect these assets to outperform in the short term as de-risking accelerates. Particularly noteworthy is the inclusion of SOL and XRP—assets that faced significant regulatory headwinds. Their inclusion suggests a pragmatic approach that prioritizes market impact over ideological purity.

Regulated Payment Stablecoins

The framework establishes a clear path for stablecoins to operate outside the securities regime, provided they comply with the 2025 GENIUS Act. This creates a two-tiered stablecoin market: compliant issuers (likely including major banks) operating in a regulated sandbox, and non-compliant issuers facing increasing pressure. We anticipate significant consolidation in the stablecoin space, with USDC and potential bank-issued stablecoins gaining market share at the expense of non-compliant alternatives.

Digital Securities

The framework clarifies that tokenized securities will be subject to traditional securities regulations, creating a parallel track for traditional finance to enter the crypto space. This represents a significant opportunity for established financial institutions to leverage blockchain technology while operating within familiar regulatory boundaries. We expect a wave of tokenized traditional assets (real estate, private equity, debt) as financial institutions gain clarity on compliance requirements.

DeFi Protocols

The favorable treatment of staking, mining, and wrapping activities is particularly noteworthy. The framework explicitly permits these activities as long as they don’t involve secondary lending, leverage, or discretionary transactions. This provides a green light for DeFi innovation while maintaining appropriate investor protections. We anticipate a renaissance in DeFi development as the regulatory fog lifts, particularly in liquid staking derivatives and decentralized trading protocols.

Strategic Implications for Investors

Portfolio Construction

This regulatory framework necessitates a fundamental reassessment of portfolio construction strategies. The traditional risk-on/risk-off binary must now incorporate a regulatory dimension. We recommend investors structure portfolios with three clear buckets:
1. Commodity-tier assets (BTC, ETH, etc.) – Core holdings with regulatory clarity
2. Compliance-dependent assets (stablecoins, tokenized securities) – Require ongoing monitoring of regulatory compliance
3. Innovation-tier assets (experimental DeFi, NFTs) – Higher regulatory risk but potential for outsized returns

Due Diligence Evolution

Due diligence processes must evolve to incorporate regulatory compliance assessments. Projects must now demonstrate clear paths to achieving “Separation” if they seek to transition from security to commodity status. Investors should prioritize projects with:
– Transparent, achievable decentralization roadmaps
– Clear separation between development teams and protocol governance
– Auditable smart contracts that minimize managerial discretion

Geographic Arbitrage

This framework positions the United States as a clear regulatory leader in the crypto space. We anticipate a talent and capital migration toward U.S.-based projects as regulatory clarity attracts institutional capital. International projects seeking U.S. market access will need to navigate this new framework, potentially creating arbitrage opportunities for projects that already comply with U.S. standards.

Risks and Uncertainties

Implementation Volatility

While the framework provides clarity, its implementation will create new uncertainties. The SEC and CFTC will need to issue additional guidance and enforcement actions that will test the boundaries of this framework. We expect periods of increased volatility as the market digests new regulatory interpretations.

Political Vulnerability

This framework represents a political compromise that could unravel with future administrations. The 2028 election cycle could bring regulatory shifts that modify or reverse aspects of this framework. Investors should monitor political appointees to regulatory positions as early indicators of potential policy shifts.

International Fragmentation

Other jurisdictions may adopt different regulatory approaches, creating a patchwork of global regulations. This will complicate operations for international projects and potentially create regulatory arbitrage opportunities. We anticipate increased focus on jurisdictional selection as a strategic consideration for crypto projects.

Conclusion: The Dawn of Institutional Crypto

The “Five-Category Law” represents more than regulatory guidance—it’s the institutionalization of crypto. By providing clear classifications and pathways for innovation, this framework enables the next phase of crypto market evolution: the integration of digital assets into traditional financial systems. For sophisticated investors, this isn’t the end of crypto’s wild west era—it’s the beginning of its maturity.

The most significant opportunity lies in identifying projects that can successfully navigate this new regulatory landscape while maintaining their innovative edge. Those that can demonstrate compliance without stifling creativity will be positioned to capture the trillions of dollars in institutional capital waiting on the sidelines.

This framework doesn’t eliminate risk in crypto markets—it redirects it. The speculative risk diminishes as regulatory clarity increases, but execution risk and competitive intensify. The market is shifting from a game of regulatory roulette to a test of genuine technological and economic innovation—a game that favors sophisticated, disciplined investors who can navigate this new landscape with both pragmatism and vision.