Blockchain Groups Press SEC to Define Digital Commodities in Crypto Rules
The SEC’s proposed crypto framework leaves a central question open: how should digital commodities be treated under securities law? Six blockchain organizations say the rules need to answer that directly, because interpretive guidance alone leaves developers and market participants uncertain. Their request goes to the framework’s basic design: if a category matters to how the rules apply, they argue, the text should say so plainly.
That distinction can affect decisions made across a blockchain project, from how a network is developed to how its assets are handled in secondary markets. The letter doesn’t claim that every digital asset should receive the same treatment. Instead, the organizations want the SEC to define digital commodities as non-securities within the proposed framework. A clear classification could give participants a more concrete starting point when assessing their obligations, though it wouldn’t answer every question about how a particular asset or activity should be treated.
A request to put the distinction in the rules
In an Oct. 20 joint letter, Chainlink Labs, the Cardano Foundation, Hedera, Aptos Labs, Ava Labs and the Stellar Development Foundation asked the US Securities and Exchange Commission to identify digital commodities as non-securities in its proposed Regulation Crypto Assets framework. They argue that the SEC already recognizes digital commodities as a distinct category, but the proposed text doesn’t reflect that distinction.
The gap they identify is between acknowledging a category and explaining what it means in the operative framework. Interpretive guidance can help explain an agency’s view, but companies may still have to work out how that view applies to their own products and activities. The organizations’ position is that the framework should make the category explicit, so participants aren’t left to infer its status from separate explanations.
That’s a drafting question with practical consequences. When rules use broad categories without clearly mapping particular assets or activities to them, developers and market participants may face uncertainty before they can decide which requirements apply. The letter’s request is intended to reduce that uncertainty at the classification stage. It can’t, by itself, settle every case that depends on a project’s details.
This is more significant than it looks. A definition in the framework could influence how participants read the rest of the proposed rules, including provisions that address offerings, trading, and network activity. The exact effect would depend on the final wording and how the SEC applies it. For now, the organizations are asking the agency to make the distinction visible in the text itself.
Trading and staking remain open questions
The organizations also want the SEC to clarify how securities laws apply to secondary-market transactions involving digital assets, along with staking and other activities on decentralized networks. Those details could shape how blockchain developers and market participants assess which rules apply to their work.
Secondary-market transactions raise a different practical question from the initial distribution of an asset: how should existing assets be treated when they change hands later? Staking and other network activities add another layer, because they involve participation in the operation or support of a decentralized system. The letter identifies these areas as matters for clarification, but the supplied account doesn’t describe the groups’ proposed answers in detail.
That leaves room for interpretation. A framework might set out broad categories while still leaving participants unsure how those categories apply to specific transactions or technical arrangements. Similar rulemaking questions often turn on how general definitions meet varied real-world activity; a label alone may not resolve every edge case. And this is the part most people overlook: clearer wording can reduce ambiguity without eliminating the need to assess how a particular activity is structured.
If you're working in this space, the immediate significance is procedural as much as substantive: the organizations are asking the SEC to address these questions while it’s developing the framework. Their request doesn’t establish what the agency will decide, or whether the final text will answer each point. It does show that some industry participants see classification, secondary trading, and network activity as connected issues rather than separate drafting details.
Public comments frame the debate
The framework, introduced in August, received roughly 140 public comments during a 60-day consultation that closed Tuesday. Industry participants and legal scholars offered competing views on proposed exemptions for crypto offerings and a conditional safe harbor for certain tokens.
The number of comments indicates that the proposal drew a broad response, but it doesn’t tell readers which view carries more weight or how the SEC will resolve disagreements. The comments covered questions about exemptions and a conditional safe harbor, while the six organizations’ letter emphasizes the status of digital commodities and the treatment of trading and network activity. Those issues may overlap in practice, yet they’re distinct questions within the wider rulemaking debate.
The consultation gives the SEC a record of competing arguments to consider. Public comments can point to uncertainty in a draft and suggest ways to address it, but participation alone doesn’t guarantee that a particular request will appear in a final rule. The decision now rests on how the agency weighs the proposals and translates its approach into regulatory text.
Magazine: 5 alternatives to Ledger to store your Bitcoin
What the final framework needs to make clear
The groups’ request puts the emphasis on writing clearer classifications into the framework itself. Whether the final rules resolve questions around trading and staking will matter to teams building and operating decentralized networks.
The broader test is whether the framework will connect its categories to the activities that developers and market participants actually need to assess. A definition of digital commodities could answer one central question, while leaving others about secondary-market transactions, staking, and decentralized network operations to be addressed separately. Specific wording matters: a clear category can guide interpretation, but broad language may still leave practical questions unanswered.
Here's the thing: the letter asks for clarity, but clarity is only useful when the rules explain how it applies. The SEC’s next steps will determine whether the final framework makes the requested distinctions explicit and how far it goes in addressing the other activities the organizations identified. For now, the unresolved issue is straightforward. A framework can create categories, but participants need to know what those categories mean for the assets and conduct they handle.
