Chainlink Labs, the Cardano Foundation, Hedera, Aptos Labs, Ava Labs and the Stellar Development Foundation submitted a joint letter to the SEC on October 20, the final day of the public consultation on the proposed Regulation Crypto Assets framework. According to the official filing published by the SEC, the organizations want the agency to incorporate its existing definition of digital commodities directly into the proposed rules.
In March, the SEC clarified that certain cryptocurrencies qualify as digital commodities rather than securities. However, the six organizations argue that the new regulatory proposal does not explicitly establish this distinction in its binding provisions. The earlier guidance and its implications for the industry were examined in our previous report on SEC and CFTC crypto regulation.
Why the SEC's Proposed Crypto Rules Matter
The organizations are seeking several changes. They want the SEC to formally confirm that a digital commodity is not itself a security, even when it has previously been sold as part of an investment contract. They also propose clearer treatment of secondary-market transactions, so that reselling a token does not automatically fall under securities regulations because of its original distribution.
Another request concerns the proposed regulatory safe harbor. The signatories want participation to remain voluntary and not be interpreted as an admission that a token was previously offered through a securities transaction.
For investors holding LINK, ADA, HBAR, APT, AVAX or XLM, clearer rules could reduce uncertainty over how these assets are traded and regulated. Crypto exchanges and developers would also have a more predictable framework for assessing their legal obligations. However, the SEC has not yet adopted the requested changes, and the agency must first review the comments submitted during the consultation.
