U.S. SEC, CFTC issue joint interpretation classifying bitcoin, ether, XRP as non-securities in principle

[DigitalToday reporter Jinju Hong] The U.S. Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) have issued a joint interpretation classifying bitcoin, ether and XRP as assets that are not securities in principle.

CoinPost, a blockchain media outlet, reported on Monday that CFTC Commissioner Michael Selig unveiled a draft set of rules for crypto trading that includes the interpretation at a symposium at Fordham University School of Law in New York on Sunday.

The core proposal is to bring retail crypto trades involving margin, leverage or lending into a separate federal regulatory framework. The CFTC explained a plan to create a new registration category, a “crypto market,” for exchanges that handle only such trades. The CFTC also began seeking public comment on a regulatory framework for retail commodity trading that includes cryptocurrencies on the same day. The deadline for submissions is within 60 days of publication in the Federal Register.

Selig divided exchanges into three stages. He classified general spot exchanges as stage 1 under state money-transmission licensing rules, exchanges that offer retail trading with margin, leverage and lending as stage 2, and exchanges that handle derivatives such as perpetual futures as stage 3. The proposal targets stage 2 businesses. Among designated contract markets already registered with the CFTC, stage 3 businesses would be able to offer such trading under adjusted rules, while businesses not yet registered would be able to choose between a general designated contract market and the new registration category.