Ask who regulates cryptocurrency in the United States and the honest answer is: it depends, and that ambiguity has shaped the industry for years. Two federal agencies share the job, and the line between them was drawn long before crypto existed. Here is how the split works and why it has been so contested.

The two agencies

The Securities and Exchange Commission (SEC) polices securities, investments such as stocks and bonds. Its remit centers on protecting investors through disclosure: companies that sell securities must register, publish audited financials and reveal risks.

The Commodity Futures Trading Commission (CFTC) oversees commodities, basic tradable goods like oil, wheat or gold, and, importantly, the futures and other derivatives contracts built on them. Its rules are generally lighter-touch than the SEC's, and its authority over everyday "spot" trading (buying the asset itself, rather than a contract on it) is narrower, focused mainly on policing fraud and manipulation.

Why crypto breaks the mold

The problem is that a crypto token does not fit neatly into either box. The main tool for deciding is the Howey test, from a 1946 Supreme Court case, as The Block explains. Under it, something is a security if people invest money in a common enterprise expecting profits from the efforts of others, a promoter or company doing the work.

By that logic, Bitcoin is widely treated as a commodity, not a security: it has no company or central team whose efforts drive its value, so it looks more like a digital commodity under the CFTC. Ether is generally viewed the same way, though with more debate. But many other tokens are sold by a startup to fund its own development, and the SEC has argued those look like investment contracts, and therefore securities it should regulate. The long-running case over the token XRP captured the nuance: a court found XRP was not automatically a security in ordinary public trading, but sales to institutions could be treated as securities offerings.

Why the label matters

This is not hair-splitting; the classification changes everything. If a token is a security, its issuer and the exchanges listing it face the SEC's heavy registration and disclosure regime. If it is a commodity, it falls under the CFTC's lighter rules, and its spot market has fewer requirements. So whether a given coin is a "security" or a "commodity" determines which rulebook applies, how it can be traded, and by whom.

The uncertainty peaked during the tenure of SEC chair Gary Gensler (2021 to 2024), when the agency brought a wave of enforcement actions against crypto firms without always spelling out in advance which tokens it considered securities, an approach critics called regulation-by-enforcement. Under his successor, Paul Atkins, the SEC has signaled a more accommodating posture, though the underlying law has not changed.

How Congress is trying to settle it

Rather than leave the question to courts and shifting agency moods, lawmakers have moved to write clearer rules. Two efforts stand out. On stablecoins, the dollar-pegged tokens used for payments, Congress passed the GENIUS Act in 2025, creating a federal framework with reserve and licensing requirements. On the broader question, a market-structure bill known as the CLARITY Act has been proposed to define a category of "digital commodities" and give the CFTC primary authority over their spot markets, while leaving genuine securities with the SEC. It is worth being precise about status: the stablecoin law is on the books, while the broader market-structure bill remains proposed rather than enacted.

The bottom line

For now, the rule of thumb holds: Bitcoin and Ether are treated mostly as commodities under the CFTC, while many newer tokens risk being deemed securities under the SEC, and exactly where each token falls can still be litigated. The direction of travel in Washington is toward giving the CFTC a larger role over crypto trading and setting clearer definitions, which would reduce the uncertainty that has dogged the industry. Until the market-structure rules are actually law, though, the two-agency puzzle, and the fights over which box a token belongs in, will remain. Boursel does not give legal or investment advice.