SEC Declares Bitcoin a 'Digital Commodity,' Not a Security

U.S. securities regulators have classified cryptocurrencies including Bitcoin and Ethereum as "digital commodities," issuing an official interpretation that they do not constitute securities.

The Securities and Exchange Commission released draft guidance on federal securities law interpretation regarding certain crypto assets and crypto asset transactions on May 17 (local time).

In the guidance, the SEC clearly determined that most cryptocurrencies—including Bitcoin, Ethereum, XRP, Solana, and Dogecoin—are digital commodities and not securities.

The SEC interpreted that cryptocurrencies do not qualify as securities because, unlike stocks (equity securities), bonds (debt securities), derivative-linked securities, and investment contract securities, they lack the characteristic of "expectation of profits derived from the entrepreneurial or managerial efforts of others."

However, the SEC determined that offerings and sales of digital collectibles structured to allow acquisition of fractional ownership—such as fractional investments—may constitute offerings or sales of securities.