What exactly are encrypted assets?

Over the past decade, the US crypto industry has remained in a peculiar state.

The market size has grown to trillions of dollars, yet a comprehensive regulatory framework has never been fully established. Two core questions have remained unanswered:

What exactly are crypto assets? Who is responsible for regulation if issues arise? These seemingly simple questions are at the root of the long-standing chaos in US crypto regulation.

In recent months, the US regulatory system has begun to send a series of new signals—these questions are being reconsidered.

Regulatory Fog Within the US financial regulatory system, crypto assets have always been caught between the jurisdiction of two major agencies: the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The SEC oversees securities markets, while the CFTC regulates commodities and derivatives trading.

The problem is, crypto assets often exhibit characteristics of both. Some tokens have fundraising features and appear to be securities. Others resemble digital commodities or online resources.

As a result, over the years, the US crypto industry has faced a core uncertainty: the same asset could be interpreted under two different regulatory logics simultaneously. Many industry insiders refer to this as the “regulatory fog.”

Companies often find it difficult to determine which set of rules applies to a product. In some cases, they must comply with two regulators at once.

This regulatory conflict impacts more than just legal disputes; it directly influences business decisions. SEC Chair Paul Atkins has publicly acknowledged that regulatory conflicts, duplicate registration requirements, and differing rule systems have, to some extent, suppressed innovation and driven some market participants to other jurisdictions.

In other words, internal disagreements within the US regulatory system are weakening its attractiveness to the crypto industry.

How to Classify Crypto Assets? For a long time, US federal securities law did not have a specific concept of “crypto assets.”

Regulators typically rely on the Howey Test to determine whether an asset qualifies as a security. This test assesses whether a transaction constitutes an investment contract. Simply put, if investors invest money and rely mainly on others’ efforts to generate profits, the arrangement may be deemed a security.

For decades, this standard has been the core basis of US securities regulation. But applying this logic to crypto assets introduces complications.

Some tokens clearly have investment attributes. Others are more like network access tokens. Still, some are just digital collectibles.

Within the same market, assets can have entirely different natures.

Faced with this complexity, the SEC proposed a new regulatory approach in November 2025. SEC Chair Paul Atkins announced that the SEC is developing a four-category classification framework based on the Howey Test. This framework divides digital assets into four types:

Digital commodities or network tokens Digital collectibles Digital tools Tokenized securities This classification marks the first systematic acknowledgment by US regulators that not all crypto assets are securities.

Who Regulates? Even as asset classification becomes clearer, another question remains.

If certain tokens are deemed digital commodities, who has regulatory authority over them?

In the US financial system, the primary regulator of commodities is the CFTC. This means that once some digital assets are classified as commodities, regulatory authority no longer solely resides with the SEC.

This has been a long-standing institutional conflict between the SEC and the CFTC.

The Fog Begins to Lift Recently, signs of easing this long-standing regulatory tension have emerged.

The SEC and CFTC announced the signing of a Memorandum of Understanding (MOU), committing to strengthen coordination across multiple areas, including:

Crypto asset regulation New digital asset products Investor protection Federal policy frameworks While the MOU itself is not legally binding, it sends a clear signal: US regulators are beginning to address the long-standing jurisdictional conflicts.

They also proposed a key goal—to establish an “adaptive regulatory framework.”

This suggests that the US may no longer simply apply traditional financial rules directly to digital assets but instead aim to design more suitable systems for this emerging market.

Behind this shift lies a broader macro context.

In recent years, major global financial centers have accelerated efforts to build digital asset regulatory systems. Some regions have introduced unified regulatory frameworks, while others attract crypto companies through clear rules.

Compared to these, the US, despite having the largest crypto market, has long maintained a fragmented regulatory landscape. More and more companies are choosing to operate in jurisdictions with clearer regulations. For the US, this trend is clearly undesirable.

Meanwhile, the structure of the crypto market is also changing.

Early crypto industry focus was mainly on native crypto assets, but now the fastest-growing sectors are stablecoins and RWA (Real-World Assets). USD stablecoins are typically backed by assets like US Treasuries; RWA involves tokenizing traditional financial assets directly.

This indicates that crypto finance is gradually integrating into traditional finance. As these sectors merge, regulatory structures must adapt accordingly.

New Regulatory Framework Looking at these developments collectively, it appears the US regulatory system is undergoing a structural overhaul.

The first step is to clearly define the basic categories of digital assets. The second is to coordinate the jurisdictional boundaries among different regulators. The third could be to establish a unified federal digital asset market rule.

If this process is completed, the US will have a comprehensive digital asset regulatory system.

From a broader perspective, this regulatory restructuring is not just about the crypto industry itself; it also concerns the future of financial rulemaking.

As stablecoins, tokenized assets, and on-chain finance develop, digital assets are increasingly becoming part of the new financial infrastructure.

Regulators worldwide are asking the same question: in the digital financial era, who sets the rules?

The current US regulatory adjustments are part of this global competition.

As rules become clearer, the crypto industry may finally move beyond long-term regulatory uncertainty into a new phase.