'Our interpretation is not an endpoint': The SEC just clarified its crypto rules, but will they stick?

Two key federal agencies have issued sweeping interpretive guidance aimed at clarifying how digital assets are regulated — but the big question now is whether that clarity has staying power in Washington.

Last week, the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission released 68 pages of interpretive guidance, detailing a token taxonomy for stablecoins, digital commodities, and "digital tools" — all of which the agency said are not securities.

That guidance clears the air in a way that hasn't been done before in the crypto industry while also telling the sector that people can build with confidence in the space, said former SEC senior counsel Ashley Ebersole. Ebersole is currently the co-founder and chief legal officer at real-world assets platform

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"In all of my years doing this work, there's never been an attempt to issue a sort of fulsome legal control, legal authority that will govern many different parts of this industry in a single fell swoop," Ebersole told The Block.

The guidance arrives as lawmakers on Capitol Hill continue efforts to pass broader crypto legislation that would formally divide oversight between the SEC and CFTC while establishing rules for exchanges, disclosures, and more.

Progress, however, has stalled.

Last year, the House passed its version of a crypto market structure bill — known as the Clarity Act — with bipartisan backing. In January, the Senate Agriculture Committee, which oversees the CFTC, passed its own version along party lines without support from Democrats.

But the effort has since bogged down in the Senate Banking Committee, where disagreements — particularly over the treatment of stablecoin rewards — remain unresolved. Those issues would need to be figured out for a bill to pass through that panel and make its way to the full Senate for a vote, then to get reconciled in the House, before eventually going to President Donald Trump's desk.

The SEC and CFTC have forged on with their own regulatory paths, but legislation would add a level of permanency that neither can achieve on their own when a new presidential administration rolls in down the road.

Under the previous Biden presidential administration, SEC Chair Gary Gensler took a starkly different approach to regulating the crypto industry than Atkins. Gensler asserted that most cryptocurrencies were securities and brought several major enforcement cases against big players in the space over concerns of failing to register, while also bringing fraud-related lawsuits as well.

Legislation is needed to future-proof work being done at both agencies, said CFTC Chair Michael Selig on Tuesday at the Digital Asset Summit.

"My biggest concern is that three or four years from now, we have the next Gary Gensler coming in and he takes an ax to everything that we've built, and we can't allow that to happen," Selig said.

Permanency 

Interpretive guidance, like the one published last week, can more easily be changed. If the agencies go through a formal notice and comment rulemaking, which can take weeks to years, they would also have to go through a similar process to change the rules as well, Ebersole said.

"So it's really just the amount of work that goes into changing it that gives it more permanence," Ebersole said.

That's why legislation is essential because it makes it much harder to reverse, he said: "That's even harder to change in a future administration because they've got to get Congress on board."

For now, the guidance is providing a boost to industry confidence.

The interpretive guidance brings certainty to the crypto industry, said Ava Labs General Counsel Lee Schneider.

"It leaves things in a good place right now, but it may not have as much permanence as people would like, given the fact that there could be rulemaking, given the fact that there could be legislation," Schneider told The Block. "I do think in the short run, it's going to even further spur innovation and development in the U.S."

Grayscale also pointed to potential growth following the release of the guidance.

"New SEC guidance clarifies that most crypto assets are not securities and may help stimulate new capital formation in the US," they said.

Crystal ball

A new session for Congress starts in January 2027, meaning a new crypto bill would have to be introduced, or reintroduced, and new lawmakers would have to catch up to speed.

"That means if it doesn't get passed this year, then we're going to have to look at late 2027 or sometime in 2028 before the window opens again, and it just makes no sense to not have legislation done this year," Schneider said.

It is hard to reverse rulemaking, but it's possible that if a crypto market structure bill is not passed into law before a new presidential administration in 2029, that would change leadership at the SEC. That new set of SEC commissioners could reverse what previous commissioners worked on, he said.

Speaking at the Digital Asset Summit, SEC Chair Atkins said that the latest guidance is only a starting point.

"I should also like to make clear that our interpretation is not an endpoint as much as a foundation," Atkins said. "Milestones like this one can tempt us to think that we have tackled the hard questions, but that would mistake progress for resolution."

Ultimately, he added, only Congress can provide the kind of lasting certainty the industry is seeking.

"Only Congress can future-proof regulation in this space through comprehensive market structure legislation,” he said.