Securities and Exchange Commission (SEC)

Created by the Securities Exchange Act of 1934 in the aftermath of the 1929 stock market crash, the SEC is led by five presidentially appointed commissioners and oversees stock exchanges, broker-dealers, investment advisers, and publicly traded companies. Its stated mission is threefold: protect investors, maintain fair and orderly markets, and facilitate capital formation.

In crypto, the SEC's central question is usually whether a digital asset qualifies as a security. It applies the Howey Test, a decades-old legal standard from a 1946 Supreme Court case, to decide whether a token represents an investment contract requiring registration. Assets deemed securities, sometimes issued as a Security Token, fall under full SEC disclosure and registration rules, while exchanges and platforms trading them must register accordingly or claim an exemption.

The SEC's crypto posture has shifted markedly over time. Under former Chair Gary Gensler it pursued aggressive enforcement against exchanges and issuers, including a high-profile case against Ripple over XRP sales. Since 2024 the agency approved spot Bitcoin and Ethereum exchange-traded funds, and under Chairman Paul Atkins it launched a dedicated Crypto Task Force, culminating in March 2026 joint guidance with the CFTC that sorts digital assets into categories such as digital commodities, digital collectibles, and digital securities.

For investors, SEC oversight signals which platforms and tokens operate within a regulated framework, though jurisdiction outside the US remains limited.