#SECCrypto2.0

SEC's Perspective on Crypto Asset Classification

Mark T. Uyeda, SEC Acting Chairman, Washington D.C., March 21, 2025

Good afternoon, and thank you for joining us at the first-ever Crypto Task Force roundtable. Today, we delve into the intricate legal challenges of determining how crypto assets fit within federal securities laws.

After the 2008 Financial Crisis, an anonymous entity known as Satoshi Nakamoto introduced Bitcoin through a white paper, laying the foundation for a revolutionary digital asset class.[1] Now, seventeen years later, industry participants, legal experts, academics, policymakers, and regulators continue to debate fundamental issues surrounding crypto’s classification under securities laws.[2] A key area of contention is applying the Supreme Court’s 1946 ruling in SEC v. W.J. Howey Co. (commonly known as the "Howey test") to crypto assets.[3]

[4] The complexities in interpreting Howey’s criteria extend beyond crypto. During my tenure as Chief Advisor to the California Corporations Commissioner, I argued in a California appellate court that bundling a non-security certificate of deposit with a separate bonus payment created an investment contract.[5] While the state court ruled otherwise,[6] several federal appellate courts have reached the opposite conclusion in similar cases.[7]

In the years since Howey, appellate courts have diverged in their interpretations of key aspects. Some rulings emphasize whether investors’ funds must be pooled for profits to be distributed proportionally,[8] while others argue that merely sharing financial risk with a promoter meets the threshold.[9] In certain jurisdictions, the success of all investors is required to depend directly on the promoter’s expertise.

This ongoing debate underscores the need for further clarity in applying securities laws to digital assets, making today’s discussions particularly timely and essential.