SEC proposes 'token taxonomy' for interpreting crypto under securities laws

The SEC just slid a regulatory nuke into the White House's inbox — a proposal that could completely reshape how crypto gets treated under securities laws. This isn't just another staff memo; this is commission-level guidance on 'token taxonomy' that'll determine which tokens are securities and which aren't. Translation: the SEC is about to draw the battle lines.

On Tuesday, the SEC submitted a 'commission interpretation on application of the federal securities laws to certain types of crypto assets and certain transactions involving crypto assets' to the White House's Office of Information and Regulatory Affairs. This carries way more weight than those staff-level statements we're used to seeing.

SEC Chair Paul Atkins and Commissioner Hester Peirce already hinted at this move back in February at ETHDenver, saying the agency wanted to clarify how tokenized securities fit within existing laws. Now they're making it official.

Meanwhile, the CFTC isn't sitting this out — they submitted their own guidance on prediction markets to the White House on Monday. CFTC Chair Michael Selig has been flexing about the agency's 'exclusive jurisdiction' over these markets. Both proposals are now under White House review.

Here's the kicker: the SEC is currently running with only three commissioners (all Republicans), and the CFTC has just one commissioner. Normally these agencies have five bipartisan commissioners each. President Trump hasn't signaled any plans to nominate more commissioners, which means these Republican-led agencies are making major moves without Democratic representation.

This comes as the Trump administration has held three meetings in 2026 about the crypto market structure bill moving through the US Senate. If that legislation passes, it'll dramatically change how both the SEC and CFTC oversee digital assets.

The timing is everything — while Congress debates market structure legislation, the regulators are pushing forward with their own interpretations that could shape enforcement for years to come.