Both do, and which one applies depends on what is being sold. The SEC oversees securities, including tokens sold as investment contracts. The CFTC oversees futures and other derivatives on commodities like bitcoin, and it can police fraud and manipulation in spot markets, but it has no general power to register spot crypto exchanges. As of November 2026, Congress had not passed a law redrawing that line. This is general information, not legal advice.
What does each agency actually regulate?
The two agencies split the work by type of financial product, not by technology. The same coin can touch both of them, depending on how it is packaged and traded.
| SEC | CFTC | |
|---|---|---|
| Full name | Securities and Exchange Commission | Commodity Futures Trading Commission |
| Main laws | Securities Act of 1933, Securities Exchange Act of 1934 | Commodity Exchange Act |
| Core job | Securities: stocks, bonds, funds and investment contracts | Derivatives such as futures and options, plus anti-fraud and anti-manipulation powers over commodity markets |
| Crypto examples | Spot bitcoin ETF shares, tokenized stocks, tokens sold with promises of profit | Bitcoin and ether futures, perpetual and leveraged products for US customers, fraud in spot trading |
| Can it register spot crypto exchanges? | Only where securities trade | No general authority without new law |
The CFTC's own consumer page puts its role this way: it has full regulatory and enforcement authority over derivatives markets that use digital commodities such as bitcoin or ether, and enforcement authority over fraud and manipulation in the cash or "spot" markets. In 2023 the CFTC's enforcement director said plainly that its authority in the spot market "is limited to prosecuting fraud and manipulation" (CFTC speech).
That gap matters to ordinary users. Buying bitcoin on a centralized exchange is a spot trade, and no single federal market regulator supervises it the way the SEC supervises a stock exchange.
How does the Howey test decide whether a token is a security?
The Howey test is the Supreme Court's definition of an investment contract, one of the things the securities laws cover. In SEC v. W.J. Howey Co., decided on May 27, 1946, a Florida company sold strips of citrus groves along with service contracts. The company farmed and marketed the fruit, and buyers shared the profits. The Court held this was an investment contract because buyers invested money in a common enterprise and expected profits from the promoter's efforts.
Applied to a token sale, the test asks four questions:
- Was there an investment of money? Paying dollars or crypto for a token counts.
- Is there a common enterprise? Buyers' fortunes are tied together, often through a shared project.
- Do buyers expect profits? Marketing that talks about price gains points this way.
- Do those profits depend on others' essential efforts? If a development team promises to build the network that gives the token value, the answer is often yes.
The test looks at the deal, not the label. A token called a "utility token" can still be sold as an investment contract, and a coin or token can stop being tied to one later.
What makes a crypto asset a commodity?
The Commodity Exchange Act defines commodities broadly, and the CFTC has long treated bitcoin as one. Its enforcement director said the agency first determined that bitcoin is a commodity in its 2015 Coinflip action.
Being a commodity does not mean the CFTC supervises every trade. It regulates the futures and options exchanges where bitcoin derivatives trade, the same way it regulates cattle or soybean futures. For the coins themselves, it steps in mainly when someone commits fraud or manipulates a price. Products with leverage are different, which is why perpetual futures and prediction markets offered to Americans fall under the CFTC.
What did the 2026 SEC-CFTC interpretation change?
On March 17, 2026, the SEC issued an interpretation of how securities law applies to crypto assets, and the CFTC joined it (SEC release 33-11412). It took effect on March 23, 2026. The SEC fact sheet sorts crypto assets into five groups:
| Category | What it covers | Security? |
|---|---|---|
| Digital commodities | Assets whose value comes from a functioning network and supply and demand | No |
| Digital collectibles | Art, music, in-game items, memes and similar | No |
| Digital tools | Memberships, tickets, credentials, identity badges | No |
| Stablecoins | Payment stablecoins issued under the GENIUS Act | No |
| Digital securities | Stocks, bonds and other securities in token form | Yes |
The Federal Register version names 18 assets as examples of digital commodities, including bitcoin, ether, solana and XRP. Three other points stand out:
- An investment contract can end. A non-security asset can be sold under an investment contract, and that contract ends when the issuer has kept its promises or failed to.
- Some activities are outside securities law. Protocol mining, protocol staking and wrapping a non-security asset do not involve the sale of a security. Certain airdrops involve no "investment of money".
- It does not change the statutes. The release says nothing in it alters either agency's statutory authority. It is an interpretation by the current commissions, not an act of Congress.
A worked example: one startup, two regulators
Suppose a small team builds a payments network and sells its token to the public for $4 million. The team promises to finish the software and attract users.
- At the sale, buyers pay money and expect the team's work to raise the token's value. Under Howey, the token is sold as part of an investment contract, so securities law applies to the offering.
- Under a pending SEC proposal, the team might use a new exemption. In August 2026 the SEC proposed Regulation Crypto Assets, which would allow up to $5 million over four years under one exemption and up to $75 million a year under another, with disclosure duties. As of November 2026 it was still a proposal.
- When the network is finished, the proposal's safe harbor would let the token be treated as no longer subject to the investment contract once the team completes or permanently stops its promised work. The token could then trade as a non-security asset.
- If a futures exchange lists the token, those futures fall under the CFTC. Fraud or manipulation in spot trading can also draw a CFTC case.
- If someone sells the token in a fund, such as an ETF, those fund shares are securities again, overseen by the SEC.
One asset can pass through both agencies' hands. That is why tokenomics disclosures and the team's promises matter legally, not only financially.
What is the CLARITY Act, and where does it stand?
The CLARITY Act (H.R. 3633) is a bill "to provide for a system of regulation of the offer and sale of digital commodities" by the SEC and CFTC. It is the main attempt to write the split into law, and as of November 2026 it had not passed.
- House: It passed on July 17, 2025, by 294 votes to 134.
- Senate committee: The Senate Banking Committee approved its version in May 2026, with every Republican member and two Democrats voting yes, according to DLA Piper.
- Senate floor: On September 15, 2026, a cloture vote on the motion to proceed failed 49 to 50, short of the 60 votes needed. Senator Thom Tillis then entered a motion to reconsider, which keeps the bill technically alive (AMINA Bank summary).
The 119th Congress ends in January 2027. A bill not enacted by then generally has to be reintroduced and start the process again. Whether the Senate takes it up again before then was unresolved as of November 2026.
What are regulators doing without a new law?
The agencies have moved on their own while Congress is stalled:
- Fewer enforcement cases. On February 27, 2025, the SEC dismissed its case against Coinbase, citing the work of its new Crypto Task Force. It later reported dismissing seven crypto cases brought by the prior commission. Its Ripple case ended in August 2025 when both sides dropped their appeals, leaving a $125 million penalty in place.
- Coordination. On March 11, 2026, the two agencies signed a memorandum of understanding that lists a "fit-for-purpose regulatory framework for crypto assets" among its goals.
- CFTC rulemaking. On October 5, 2026, the CFTC published an advance notice of proposed rulemaking on leveraged, margined or financed retail crypto trades, called Regulation CTX, and a new type of venue, called Regulation CAM. Its chairman said it lacks authority to require crypto to trade on CFTC-registered platforms without congressional action.
Guidance and proposals can change faster than law. A future commission could revise them, which is part of why the industry still wants a statute.
Who else regulates crypto in the US?
The SEC and CFTC are not the only regulators, and for many users the others matter more day to day:
- FinCEN treats crypto trading platforms as money services businesses. The CFTC tells consumers to check the FinCEN registry before using one.
- States license exchanges as money transmitters. New York requires a BitLicense or a limited purpose trust charter.
- Banking regulators oversee payment stablecoin issuers under the GENIUS Act.
- The IRS treats crypto as property for tax purposes, whichever agency oversees the market.
Other countries draw these lines differently. The EU, for example, has a single framework, covered in what MiCA is. For more, see our regulation hub, and the Bitcoin and Ethereum hubs for the two assets regulators name most.
What does the split mean for you?
The practical lesson is to know which protections apply before you trade. A spot bitcoin ETF bought through a broker sits inside securities law. Bitcoin held on an exchange is mostly covered by state licensing and federal anti-fraud powers. Coins in your own self-custody wallet depend on your own security.
If you are buying for the first time, the steps in how to buy crypto safely start with checking a platform's registrations. Rules vary by state and are changing, so ask a qualified lawyer before relying on any of this for a business decision.
Key takeaways
- The SEC regulates securities, including tokens sold as investment contracts, and the CFTC regulates commodity derivatives such as bitcoin futures.
- The CFTC can pursue fraud and manipulation in spot crypto markets but cannot register spot exchanges without new law.
- The Howey test asks whether buyers invested money in a common enterprise expecting profits from others' efforts, and it looks at the deal, not the label.
- A March 2026 joint interpretation sorted crypto into five categories and said only digital securities are securities, but it does not change the statutes.
- As of November 2026, the CLARITY Act had passed the House but stalled in the Senate after a 49 to 50 vote in September 2026.
Sources
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