On March 17, 2026, the SEC and Commodity Futures Trading Commission (CFTC) issued a landmark joint interpretation establishing the agencies’ first formal classification framework for crypto assets under federal securities and commodities law. After more than a decade of regulatory ambiguity, this guidance provides the agencies’ current position and more clarity on the question: which digital assets are securities?
In short, the answer is that most are not. The new token taxonomy addresses five asset categories, with only one of the five categories (digital securities) fully in scope of SEC jurisdiction. The guidance may carry immediate implications for fund accounting, portfolio classification, income recognition, regulatory compliance, and investor disclosure. A separate formal rulemaking proposal expected to exceed 400 pages is expected within weeks and will include additional details, safe harbor provisions, and an innovation exemption.
These conclusions represent the agencies’ current views and are subject to change through future rulemaking, litigation, or a change in administration. Congressional action, e.g., CLARITY Act, may be the only way to guarantee permanence.
In the meantime, there are critical takeaways for funds and fund managers in relation to this guidance:
- Most crypto holdings in fund portfolios are now classified as commodities or other non-securities, fundamentally changing how they are accounted for, valued, and disclosed.
- The agencies indicated staking income, mining rewards, and airdrop proceeds are non-securities transactions, resolving longstanding income recognition uncertainty.
- Classification is not permanent, meaning assets can move in and out of securities status. This will create a novel ongoing audit and compliance obligation.
- A separate formal rulemaking proposal (over 400 pages as previously mentioned) is anticipated within weeks and will expand this interpretive release. Begin reviewing holdings, disclosures, and compliance programs now to remain informed.
The Five-Category Token Taxonomy
The new joint interpretation provides the following classification framework for crypto assets. Note that classification as a non-security does not exempt an asset from all regulations, e.g., digital commodities remain subject to CFTC oversight.
| Category | SEC Status | Description |
|---|---|---|
| Digital Commodities | Not a security | BTC, ETH, SOL, XRP, & 12 others named. Value derived from programmatic operation of a “functional” crypto system.1 |
| Digital Collectibles | Not a security | Art, music, trading cards, in-game items, and meme coins acquired for artistic entertainment, or cultural purposes. Note: fractionalized collectibles may still qualify as investment contracts; facts and circumstances apply.2 |
| Digital Tools | Not a security | Memberships, tickets, credentials, identity badges, title instruments. |
| Payment Stablecoins | Not a security3 | Issuers compliant with the GENIUS Act (enacted July 2025; implementing regulations effective est. November 2026) only. Other stablecoins remain case-by-case. |
| Digital Securities | Subject to securities laws & SEC oversight | “Tokenized” securities, “formatted as or represented by a crypto asset, where the record of ownership is maintained in whole or in part on or through one or more crypto networks.” 4 Only category fully within SEC jurisdiction. |
Note: The CFTC confirmed it will administer the Commodity Exchange Act consistently with this framework, establishing clear parallel regulatory lanes. Classification as a “non-security” does not mean unregulated.
Staking, Mining, & Airdrops Clarified
Several contested areas of crypto fund income recognition have been addressed by the guidance. They include:
- Protocol staking rewards: All four covered staking structures (solo, self-custodial, custodial, and liquid staking) fall outside securities regulation so long as service providers act as agents without discretionary control over staking decisions, don’t guarantee rewards, and don’t use deposited assets for any purpose beyond staking on the depositor’s behalf.
- Protocol mining: Whether solo or through a pool, protocol mining is not a securities transaction because miners earn rewards through their own computational contributions (which the letter characterizes as administrative or ministerial activity rather than passive investment in others’ essential managerial efforts).
- Airdrops: Airdrops of non-security crypto assets (where recipients provide no money, goods, services, or other consideration in exchange) are not securities transactions due to the Howey test (wherein investment of money is not met).
- Wrapped tokens: A redeemable wrapped token backed one-for-one by a deposited non-security crypto asset that is not subject to an investment contract is not a security because it merely evidences ownership of the deposited asset and the wrapping process itself is administrative or ministerial in nature with no pooled investment, no essential managerial efforts, and no financial return beyond fixed one-for-one redemption.
Regulatory & Compliance Considerations
The guidance reshapes the compliance landscape for registered investment advisers (RIAs), exempt reporting advisers (ERAs), and fund managers across several dimensions.
The first being Form ADV/RAUM. Assets reclassified from securities to commodities may reduce regulatory assets under management (RAUM) for Form ADV purposes. RIAs should assess whether any holdings previously included in RAUM no longer qualify, and whether thresholds for SEC vs. state registration are affected.
Next are custody rules. The SEC’s custody rule analysis has historically turned, in part, on whether an asset is a security. Assets now classified as commodities may fall outside the SEC’s custody framework. This area is expected to be addressed further in the forthcoming formal rulemaking.
Fund offering documents is another area to keep in mind. Private fund private placement memorandums (PPMs), limited partnership agreements (LPAs), and registered fund prospectuses may contain risk factors, investment restriction language, or classification-based provisions that require updating. Counsel should review these items before the next investor communication.
In addition, there is CFTC registration (related to CPO/CTA). Broader digital commodity classification may expand the scope of commodity pool activity for some funds, triggering reassessment of commodity pool operator (CPO) or commodity trading adviser (CTA) registration obligations.
As for limited partners (LP) and investor reporting, LPs, pension plan investors, and endowments often have investment mandates tied to asset class. Fund managers should proactively communicate any reclassification impacts, particularly where LP guidelines reference securities-specific limitations in relation to the framework.
Finally, BSA/AML programs should be a focus. Funds with expanded digital asset exposure should assess whether Bank Secrecy Act and anti-money laundering (AML) program frameworks adequately address the revised asset universe, including customer identification and suspicious activity reporting obligations.
What Comes Next: More Guidance Is Imminent
Since the current interpretation is merely a starting point, it is crucial to consider other developments to come in the near term.
Formal rulemaking information is expected to be released within weeks. The SEC is preparing a separate formal rulemaking proposal anticipated to exceed 400 pages, including a proposed “innovation exemption” for crypto firms and safe harbor provisions for capital raising. A public comment period will follow.
Moreover, the guidance is designed to bridge bipartisan Congressional legislation. For example, the CLARITY Act passed the House in July 2025 with bipartisan support (294–134) and cleared the Senate Agriculture Committee in January 2026. However, it has not yet passed the Senate. A dispute between financial institutions and crypto firms over stablecoin yield provisions (among other items) remains unresolved. It is encouraged to track Senate progress on this closely, as passage would codify a durable statutory structure for digital asset markets.
Stablecoin treatment under this interpretation depends on GENIUS Act compliance. As a refresher, this was enacted into law in July 2025 with full implementing regulations expected to take effect in November 2026. Funds using stablecoins for liquidity management should confirm counterparty issuers meet the Act’s requirements now, and monitor implementing regulations as they are finalized.
Finally, the SEC and CFTC signed a memorandum of understanding (MOU) on overlapping jurisdiction on March 11, 2026, one week prior to the issuance of this joint interpretation. Expect continued joint guidance on specific asset categories and activities on further harmonization.
Recommended Immediate Actions for Funds & Fund Managers
There are several steps that funds and fund managers can take based on the new guidance. For starters, review financial statements, accounting policies, and disclosures for necessary updates based on the framework. Individuals can also study RAUM calculations and Form ADV disclosures for potential RIA registration impact, and review PPM risk factors, investment restrictions, and LP reporting for classification-driven language.
Teams can also consult fund counsel on custody rule implications for newly classified digital commodities and assess CPO/CTA registration status (in light of expanded digital commodity classification). Finally, be sure to monitor the forthcoming formal rulemaking for additional details.
How Forvis Mazars Can Help
The alternative investment services team at Forvis Mazars has more than 50 years of experience providing audit, tax, and consulting services to private funds, registered funds, and RIAs (from emerging managers to $100+ billion AUM). As of November 2025, Convergence Optimal Performance ranked Forvis Mazars as a top 15 accounting and audit firm to RIAs by both count and AUM.
We are actively monitoring the forthcoming formal rulemaking and will provide additional guidance as it evolves. In the meantime, our team can assist with:
- Digital asset accounting policy review and implementation
- Fund financial statement reclassification analysis
- RIA Form ADV and RAUM impact assessment
- Project planning and documentation
- Audit and attestation services for digital asset holdings
- LP and investor communication support
- Regulatory compliance program review
For questions, please contact the engagement team or reach out to our alternative investment services professionals.
- 1For purposes of this release, a crypto system is “functional” if the system’s native crypto asset can be used on the system in accordance with the programmatic utility of the system. The term “native” in the context of a crypto asset refers to a crypto asset generated for use on a particular crypto system.
- 2For example, fractionalized interests in artwork may in some circumstances be deemed securities even though the underlying artwork itself is not a security because interests in the fractional pool may constitute investment contracts.
- 3Stablecoins that don’t qualify as payment stablecoins under the GENIUS Act framework may still be securities depending on facts and circumstances.
- 4https://www.sec.gov/files/rules/interp/2026/33-11412.pdf