On March 11, 2026, SEC Chair Paul Atkins and CFTC Chair Michael Selig signed a Memorandum of Understanding (MOU) — a formal, written cooperation pact between two US financial regulators — that reorganised how the federal government polices digital assets. Six days later, on March 17, 2026, the two agencies followed with a joint interpretive release laying out a five-category token taxonomy. Neither document is a statute. Neither needed a Senate vote. Yet together, as of April 2026, they define the practical jurisdictional map for crypto in the United States more than any law on the books.

That matters because the law on the books has not actually changed. The Digital Asset Market Clarity Act (CLARITY Act, H.R.3633) — the House-passed market-structure bill that would codify who regulates what — remains pending in the Senate. The lines that actually fell in 2025 and early 2026 were drawn administratively: through dropped enforcement actions, new leadership, and guidance the agencies can issue without Congress.

How we got here: the investment-contract era

For most of the prior decade, the SEC (Securities and Exchange Commission) took the position that the vast majority of crypto tokens were securities. Its legal tool was the Howey test — a 1946 Supreme Court rule under which an asset is an investment contract, and therefore a security, when a buyer invests money in a common enterprise expecting profits from the efforts of others. Under Chair Gary Gensler, the Commission pressed that theory in litigation against Coinbase, Binance, Ripple, Kraken, and others.

The CFTC (Commodity Futures Trading Commission) occupied the other half of the map. It had clear jurisdiction over Bitcoin and Ether derivatives as commodities, but no unambiguous authority over spot-market trading of digital commodities. That statutory gap — not any settled doctrine — drove years of forum shopping between agencies.

The 2023 partial ruling in the Ripple case (Judge Torres, Southern District of New York) captured the incoherence. The court held that Ripple's programmatic, exchange-based sales of XRP were not securities transactions, while its institutional sales were. It was a legal high-water mark that, more than anything, demonstrated how badly case-by-case adjudication was serving both issuers and investors.

The 2025 reset: new leadership, dropped cases

The shift began under an Acting Chair. On January 21, 2025, the SEC announced a Crypto Task Force under Acting Chair Mark Uyeda, with Commissioner Hester Peirce — a long-standing critic of enforcement-led crypto policy — designated to lead it. The Task Force became the vehicle for unwinding the Gensler-era posture.

Paul Atkins was confirmed by the Senate on April 9, 2025 and sworn in as the 34th SEC Chair on April 21, 2025. The litigation calendar then emptied quickly. The Commission filed a joint stipulation to dismiss its civil action against Coinbase on February 27, 2025. On May 29, 2025, it dismissed its case against Binance, BAM Trading, BAM Management, and Changpeng Zhao with prejudice — the form of dismissal that bars the same claims from being refiled. On August 7, 2025, the SEC and Ripple jointly dismissed their appeals, ending the five-year XRP litigation; Ripple's $125 million civil penalty from the 2023 judgment stayed in place.

The Department of Justice moved in the same direction. In an April 2025 memo, Deputy Attorney General Todd Blanche disbanded the National Cryptocurrency Enforcement Team (NCET) and wrote that "the Department of Justice is not a digital assets regulator." Criminal fraud cases continue; the specialised crypto prosecution unit does not.

Legislative state of play: GENIUS is law, CLARITY is not

Congress acted on one half of the perimeter and stalled on the other. The GENIUS Act (S.1582) passed the Senate 68-30 on June 17, 2025, the House 308-122 on July 17, 2025, and was signed by President Trump on July 18, 2025. It explicitly excludes a permitted payment stablecoin from both the definition of "security" under federal securities laws and "commodity" under the Commodity Exchange Act — a statutory carve-out that removes payment stablecoins from the SEC-versus-CFTC debate entirely. For a fuller treatment, see the US stablecoin framework under the GENIUS Act.

The CLARITY Act is a different story. The House passed it 294-134 on July 17, 2025, but as of April 2026 it has not passed the Senate and has not been signed into law. The Senate Agriculture Committee advanced its own version on January 29, 2026, and the Banking Committee markup is expected in late April 2026 — any of which can still stall. Its predecessor, FIT21 (H.R.4763, 118th Congress), passed the House 279-136 on May 22, 2024 but never advanced in the Senate; the CLARITY Act inherited its SEC/CFTC split structure when the 119th Congress took over.

Until CLARITY is enacted, the underlying statutes have not changed. What has changed is how the two agencies have agreed to read them.

The March 2026 MOU and joint interpretation

Michael Selig was confirmed by the Senate as CFTC Chair on December 18, 2025 and sworn in as the 16th Chairman on December 22, 2025. Less than three months later, he and Atkins signed the March 11, 2026 MOU. The agreement creates a Joint Harmonization Initiative, co-led by Robert Teply for the SEC and Meghan Tente for the CFTC, covering six workstreams: product definitions, clearing and margin, dual-registration friction, a fit-for-purpose regulatory framework for crypto assets, regulatory reporting, and cross-market surveillance and enforcement.

On March 17, 2026, the agencies issued a joint interpretive release (SEC Release Nos. 33-11412, 34-105020). Unlike a rule, an interpretive release sets out how regulators currently read existing law; it can be issued without notice-and-comment rulemaking, but it also binds less firmly and is more exposed to change or challenge. The release lays out a five-category token taxonomy:

Digital commodities — tokens whose economic characteristics resemble commodities rather than securities, sitting primarily on the CFTC side of the map.
Digital collectibles — non-fungible assets held principally for their unique characteristics.
Digital tools — tokens whose purpose is functional access or usage on a network rather than investment.
Stablecoins — with permitted payment stablecoins already carved out by the GENIUS Act.
Digital or tokenized securities — the residual category, and the one where the SEC retains full authority.

The interpretation also emphasises that investment-contract status is transaction-specific. A token sold as part of a securities offering can outgrow that characterisation once the promised managerial efforts are complete or abandoned, and secondary-market sales of a non-security token generally do not themselves constitute securities transactions.

Token classification in 2026: Project Crypto and the ACT strategy

The guidance sits inside a broader agenda Atkins unveiled in a July 31, 2025 speech called "Project Crypto." Its framing — ACT, for Advance, Clarify, Transform — replaces enforcement-led policy with rulemaking and interpretive guidance. Atkins has said publicly that "very few" tokens should be treated as securities, and the Commission telegraphed formal 2026 rulemakings in its September 4, 2025 Office of Information and Regulatory Affairs agenda: a comprehensive crypto asset framework and amendments to the Exchange Act for crypto trading. The Commission has also aimed to formalise an innovation exemption — a tailored safe harbour that would let qualifying token projects operate under scaled-down disclosure obligations rather than full registration.

For a team evaluating a token offering in 2026, the practical sequence follows from the MOU and the interpretive release. First, apply the five-category taxonomy to the asset. Second, if it plausibly sits in the digital-securities bucket, consider whether the innovation exemption and tailored disclosures apply. Third, coordinate with CFTC registration paths for any digital-commodity activity under the MOU's dual-registration track — the workstream designed to reduce friction when a single venue lists tokens on both sides of the line. For readers new to the US-EU landscape, MiCA and the GENIUS Act compared remains the baseline.

The contrast with Europe is sharp. Where the EU chose a codified market-structure regime — see MiCA's second year for what full enforcement looks like — the US in April 2026 is still relying on guidance plus a cooperation pact between two agencies. That gives it flexibility. It also makes the map easier to redraw.

What to watch next

Several questions remain genuinely open as of April 2026.

The first is the CLARITY Act itself. After the Senate Banking Committee markup expected in late April 2026, any Senate-passed version would still need to be reconciled with the Agriculture Committee's text and then with the House bill. Any of these steps can stall. Without CLARITY, the current settlement depends on two regulators agreeing to continue interpreting the law the same way.

The second is durability. Interpretive releases bind less firmly than codified rules, and they can be revised by a future Commission or challenged in court. The March 17, 2026 release has not been tested in either venue.

The third is whether the SEC's proposed rulemakings — the comprehensive crypto framework and the Exchange Act amendments for crypto trading, both on the 2026 agenda — make it through notice-and-comment and into final rules before the political calendar turns.

The fourth is private enforcement. Dismissal of SEC civil cases does not preclude state attorneys general (particularly in New York) or plaintiffs in class actions from arguing that specific tokens were offered as securities. The federal truce does not settle state law, and it does not bind private plaintiffs.

For now, the jurisdictional lines have been drawn administratively, in writing, by two sitting chairs. Whether they harden into statute or fade into the next policy cycle is the open question the next twelve months will answer.