The SEC’s role in US crypto markets: what it covers
The SEC regulates crypto assets that count as securities, not all crypto. It also reviews ETF applications and enforces fraud cases against platforms.
Vahe HakobyanEditor-in-chief
Updated Oct 6, 20263 min readFact-checked
On this page
- Crypto exchanges and brokers trading securities must register or qualify for an exemption.
- The SEC reviews crypto ETF applications and can approve or deny them.
- The SEC enforces securities laws against crypto fraud and unregistered offerings.
- The CFTC and FinCEN share oversight of crypto commodities and anti-money laundering.
The SEC is the US Securities and Exchange Commission, the federal agency that oversees securities markets and protects investors. It has no separate crypto rulebook, so it applies existing securities laws to crypto offerings, trading platforms, and funds.
What is the SEC's crypto role?
The SEC regulates crypto assets that meet the definition of a security, not every crypto asset or platform. Courts use the Howey test, which asks whether buyers put money into a common enterprise and expect profits from the efforts of others.
What crypto activity does the SEC oversee?
Crypto exchanges, brokers, and dealers that trade assets the SEC treats as securities must register with the SEC or qualify for an exemption. The SEC also enforces securities laws against crypto fraud and unregistered offerings. Its Cyber and Emerging Technologies Unit pursues cases involving hacked accounts, inside information, and price manipulation.
Does the SEC approve crypto ETFs?
The SEC reviews applications for crypto exchange-traded funds and can approve, deny, or delay them. It approved the first US spot bitcoin ETFs in January 2024, and spot ether ETFs later that year.
Which agencies share crypto oversight?
The CFTC oversees crypto commodities and derivatives, and FinCEN enforces anti-money laundering rules for crypto businesses. One crypto asset can fall under more than one agency's rules.
Frequently asked questions
The SEC has not named bitcoin or ether as securities in a final rule. The CFTC treats bitcoin as a commodity, and ether is generally treated that way.
No. The Howey test turns on the facts of each sale, so a token can be a security in one offering and not in another.
The SEC has treated some staking programs as investment contracts when a platform pools tokens and offers returns. That position comes from enforcement actions rather than a published rule.
The SEC can sue an exchange that breaks securities laws and ask a court to stop its operations. It cannot ban crypto outright, because it regulates securities rather than all crypto.
