Chainlink Labs, Hedera Hashgraph, Aptos Labs, Ava Labs, the Stellar Development Foundation and the Cardano Foundation urged the U.S. SEC on Oct. 20, 2026, to codify the status of digital commodities directly in its proposed Regulation Crypto Assets rules. The six organizations said the changes would provide greater legal certainty for crypto developers, including on token classification and secondary-market transactions.

In their joint submission, the organizations proposed four changes to the draft rules. Their central request was to move the definition and legal status of a digital commodity from the proposal’s explanatory section into the regulatory text.

The organizations backed clarifications issued by the SEC and the Commodity Futures Trading Commission on March 17, 2026. That guidance divided crypto assets into five categories: digital commodities, digital collectible assets, digital instruments, stablecoins and digital securities.

Chainlink head of policy Taylor Barr said in an Oct. 20 post: “Builders need lasting certainty. Codifying this progress would be a meaningful step toward keeping America the home of digital asset innovation.”

Proposed digital-commodity definition

Under the group’s proposed definition, a digital commodity would be a crypto asset whose value is tied to the operation of a functional crypto system and to supply and demand, rather than to an expectation of profit from the managerial efforts of others. The organizations also proposed stating explicitly that a digital commodity is not a security even when it is connected to an investment contract.

The SEC and CFTC’s March guidance classified LINK, HBAR, APT, AVAX, XLM and ADA as digital commodities, according to the submission. The organizations asked the SEC to preserve those classifications in the final regulatory text.

Secondary trading, safe harbor and regulatory continuity

The organizations also proposed a presumption for secondary-market transactions. Under their proposal, a sale of a digital commodity by someone other than its issuer would generally not involve an investment contract if the issuer’s promises of material managerial efforts were no longer in effect.

They also called for a class exemption from certain requirements for transactions involving digital commodities already designated by the regulator, without requiring the filing of Form TR.

The submission asked the SEC to confirm that the Rule 400 safe-harbor mechanism, including the filing of Form TR, would be voluntary. Using the mechanism should not be treated as an admission that a crypto asset was or is subject to an investment contract, the organizations said. Declining to use it should not automatically create the opposite presumption.

The organizations also asked the SEC to confirm that the final rules would not alter the classifications established in the March guidance or reallocate authority between the SEC and the CFTC.

The SEC presented the draft Regulation Crypto Assets rules in August 2026. The proposal is intended to govern offers and sales of crypto assets, including cases in which a token is not itself a security but is connected to an investment contract. The amendments remained in draft form when the organizations filed their submission.

Ripple backs proposed framework

Ripple Labs separately supported the proposal and urged the SEC to finalize it. Ripple said the initiative was grounded in existing law and legal principles shaped by the Howey case.

Ripple highlighted three elements of the proposed framework. It said an investment contract does not turn the related crypto asset into a security because the security is the investment contract itself, rather than necessarily the token associated with it.

The company also said investment obligations can end and that a crypto asset should not remain indefinitely tied to an investment contract after the relevant obligations cease. Determining whether an investment contract exists or has ended should depend on the issuer’s statements and obligations, Ripple said, rather than only on the market’s general view of decentralization.

The SEC has also prepared a proposal addressing rules for the custodial storage of crypto assets.

Source: Incrypted