For over a decade, the U.S. crypto industry has remained in a peculiar state.
The market has grown to a trillion-dollar scale, yet a complete regulatory framework has never been established. The two most critical questions have long gone unanswered:
- What exactly are crypto assets?
- If issues arise, who is ultimately responsible for regulation?
These questions may seem simple, but they have been the root cause of long-term regulatory chaos in the U.S. crypto space.
Over the past few months, however, the U.S. regulatory system has begun sending a series of new signals—these two questions are being answered anew.
Regulatory Fog
Within the U.S. financial regulatory system, crypto assets have long existed at the jurisdictional boundary between two major agencies: the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The SEC oversees the securities market, while the CFTC regulates commodity and derivatives trading.
The problem is that crypto assets exhibit characteristics of both. Some tokens have fundraising attributes and resemble securities. Others function more like digital commodities or network resources.
Consequently, for many years, the U.S. crypto industry has faced a core uncertainty: the same asset could be interpreted under two different regulatory logics simultaneously. This situation has been termed the "regulatory fog" by many industry insiders.
Companies often struggle to determine which set of rules a particular product must comply with. In some cases, firms even have to deal with both regulatory agencies at once.
The impact of this regulatory conflict extends beyond legal disputes. It directly influences corporate business decisions. SEC Chairman Paul Atkins acknowledged in a public speech that regulatory conflicts, duplicate registration requirements, and differing rule systems have, to some extent, stifled innovation and driven some market participants to other jurisdictions.
In other words, the divisions within the U.S. regulatory system itself are diminishing its appeal to the crypto industry.
How are Crypto Assets Classified?
For a long time, U.S. federal securities law lacked the concept of "crypto assets."
Regulators typically rely on the Howey Test to determine if an asset qualifies as a security—assessing whether a transaction constitutes an investment contract. Simply put, if investors provide capital and expect profits primarily from the efforts of others, that arrangement may be deemed a security.
For decades, this standard has been a cornerstone of U.S. securities regulation. But applying this logic to crypto assets introduces complexity.
Some tokens clearly have investment attributes. Others function more like network access credentials. Some are merely digital collectibles.
Within the same market, the nature of assets can vary drastically.
Faced with this complexity, the SEC proposed a new regulatory approach in November 2025. SEC Chairman Paul Atkins stated that the SEC is establishing a four-category token classification framework based on the Howey Test. This framework divides digital assets into four types:
- Digital commodities or network tokens
- Digital collectibles
- Digital instruments
- Tokenized securities
This classification framework also marks the first time U.S. regulators have systematically acknowledged that not all crypto assets are securities.
Who Regulates?
But even as asset types begin to clarify, another question remains.
If certain tokens are classified as digital commodities, who ultimately holds regulatory authority?
In the U.S. financial system, the primary regulator for commodity markets is the CFTC. This means that once certain digital assets are deemed commodities, regulatory power no longer rests solely with the SEC.
This has been the longstanding institutional conflict between the SEC and CFTC over the past years.
The Fog Lifts
Recently, signs of easing have emerged in this long-standing regulatory divide.
The SEC and CFTC announced the signing of a Memorandum of Understanding (MOU), committing to enhance coordination in several areas, including:
- Crypto asset regulation
- Novel digital asset products
- Investor protection
- Federal-level policy frameworks
Although the MOU itself is not legally binding, it sends a clear signal: U.S. regulators are beginning to attempt to resolve long-standing jurisdictional conflicts.
The two agencies also proposed a key goal—establishing a "fit-for-purpose regulatory framework."
This suggests that the U.S. may no longer simply apply traditional financial rules directly to digital assets but instead attempt to design a more suitable system for this emerging market.
This shift is set against a broader macro backdrop.
In recent years, major global financial centers have been accelerating the construction of digital asset regulatory systems. Some regions have already launched unified regulatory frameworks. Others are attracting crypto businesses by clarifying rules.
In contrast, although the U.S. possesses the largest crypto market, its regulatory system has long been fragmented. An increasing number of companies are choosing to operate in jurisdictions with clearer regulations. For the U.S., this trend is clearly not ideal.
Simultaneously, the structure of the crypto market is also changing.
The early crypto industry primarily revolved around native crypto assets, but now the two fastest-growing areas are: stablecoins and RWA (Real World Assets). Dollar stablecoins are often backed by assets like U.S. Treasury reserves; RWA involves the direct tokenization of traditional financial assets.
This means that crypto finance is gradually integrating with the traditional financial system. As the two begin to converge, the regulatory structure must also adapt accordingly.
The New Regulatory Structure
Viewing this series of changes together, the U.S. regulatory system appears to be undergoing a structural reorganization.
- The first step is clarifying the basic classification of digital assets.
- The second step is coordinating the jurisdictional boundaries between different regulatory agencies.
- The third step may involve establishing unified federal-level rules for the digital asset market.
If this process is ultimately completed, the U.S. will have formed a comprehensive digital asset regulatory system.
From a broader perspective, this regulatory restructuring is not only about the crypto industry itself. It also concerns the right to set the rules for the future financial system.
With the development of stablecoins, tokenized assets, and on-chain finance, digital assets are gradually becoming new financial infrastructure.
Regulators worldwide are attempting to answer the same question: in the era of digital finance, who makes the rules?
The current regulatory adjustments in the U.S. are part of this competition.
And as the rules gradually become clearer, the crypto industry may also transition from a long period of regulatory uncertainty into a new phase.
*This content is for reference only and does not constitute any investment advice. The market carries risks, and investment requires caution.
