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Is Crypto a Security? (Part V)
The opinion editorial below was written by Alex Forehand and Michael Handelsman for Kelman.Law.
The U.S. regulatory environment for digital assets in 2025 remains fragmented, policy-driven, and dependent on shifting administrative priorities. While courts have supplied some clarity—especially around secondary-market transactions and the distinction between tokens and investment contracts—the federal regulatory architecture is still defined more by agency posture than by statute. This Part surveys the key players, their current approaches, and the status of legislative efforts as 2025 closes.
SEC Enforcement in 2025
The SEC continues to exert significant influence over the digital-asset industry, although its posture has shifted notably from its peak enforcement years. The agency still prioritizes cases involving unregistered exchanges, staking-as-a-service platforms, token sales tied to fundraising, and airdrop-based growth campaigns, reflecting a focus on intermediaries and promotional schemes rather than decentralized protocol activity.
Despite this, 2025 has brought visible signs of restraint. Senior leadership has issued pro- crypto speeches and the commission created a Crypto Task Force whose goal is to shift the agency away from regulation-by-enforcement toward developing a comprehensive regulatory framework. Notably, the SEC recently removed digital assets from its 2026 Examination Priorities, signaling that the sector is no longer considered a special risk area warranting heightened scrutiny.
This shift suggests a growing recognition—both within the agency and across the broader regulatory ecosystem—that aggressive enforcement is not a substitute for a coherent statutory framework.
Still, the SEC’s tone is not a legal guarantee. Enforcement priorities change with administrations, and without explicit federal legislation, the current moderation remains a matter of policy discretion, not binding law. As a result, the industry cannot rely on today’s lighter touch persisting indefinitely.
CFTC v. SEC Jurisdiction
Dual jurisdiction has become a defining feature of U.S. digital-asset regulation. The CFTC has consistently taken the position that most tokens—particularly those with decentralized or commodity-like characteristics—are commodities under the Commodity Exchange Act. The SEC, by contrast, treats many tokens as investment contracts, especially when tied to early-stage ecosystems, issuer-driven growth, or fundraising activities.
Because a token can be both a commodity and part of an investment contract, regulation often overlaps. This is most visible in increasingly common categories such as:
- DeFi derivatives, where automated protocols may facilitate swaps or margin-like exposures;
- Perpetual futures markets, which fall squarely within CFTC derivatives jurisdiction but may involve tokens distributed through SEC-regulated transactions; and
- Staking or validator services, which may implicate both investment-contract considerations (under the SEC) and commodity-based service arrangements (under the CFTC)
This duality creates persistent uncertainty. Market participants often find themselves navigating two federal regimes simultaneously, even when the agencies’ statutory mandates do not fully align.
Pending Federal Legislation
Congress continues to debate multiple digital-asset market-structure bills, including versions of what has commonly been referred to as a federal CLARITY Act. While the details vary across proposals, these bills generally aim to:
- Define when a token transitions from a security to a commodity, giving issuers a pathway out of SEC jurisdiction once decentralization thresholds are met.
- Create a federal registration regime for “digital commodities” issuers, allowing compliant token offerings without defaulting to securities–law frameworks.
- Clarify exchange registration and oversight requirements, delineating when platforms fall under SEC versus CFTC supervision.
Despite increasing bipartisan interest, none of these proposals has yet become law. While the GENIUS Act regulates stablecoins specifically, as of 2025, no unified federal regulatory framework governs digital assets generally. Instead, the U.S. landscape remains a patchwork of agency interpretations, enforcement cases, judicial rulings, and administrative guidance.
In the absence of federal legislation, states continue to fill the gaps through money-transmission laws, virtual-currency licensing regimes, digital-asset statutes, and consumer-protection frameworks. The result is a multijurisdictional compliance challenge where firms must navigate both federal uncertainty and state-by-state fragmentation.
Conclusion
By late 2025, U.S. crypto regulation is at a turning point. The SEC’s tone has softened, the CFTC maintains its commodity-based approach, and Congress shows real—though still unrealized—momentum toward building a comprehensive framework.
But until legislation establishes clear lines of authority and a consistent pathway for token issuance and exchange operation, regulatory uncertainty will continue to shape the industry. The practical reality for builders, exchanges, validators, and investors is that compliance remains a moving target—one that requires close attention to both evolving case law and shifting agency priorities.
Staying informed and compliant in this evolving landscape is more critical than ever. Whether you are an investor, entrepreneur, or business involved in cryptocurrency, our team is here to help. We provide the legal counsel needed to navigate these exciting developments. If you believe we can assist, schedule a consultation here.