Thirty months. That is the window Alex Thorn, head of firmwide research at Galaxy, says the crypto industry has before the current regulatory clarity expires — assuming Congress does nothing.
On Tuesday, the Securities and Exchange Commission published new guidance establishing a five-category taxonomy for digital assets: digital commodities, digital collectibles including non-fungible tokens, digital tools, stablecoins, and tokenized securities. The framework, developed alongside the Commodity Futures Trading Commission, classifies most cryptocurrencies and tokens as non-securities — a substantial departure from the approach taken under former Chairman Gary Gensler.
Thorn called it the “final nail” in the coffin of that era’s policy.
The reason that phrase carries legal weight is technical but not complicated. According to the announcement, the old SEC framework operated through legislative rules — formal regulations that require public notice-and-comment periods, carry the force of law, and bind both the agency and the parties it regulates. The new guidance was filed as an interpretive rule, which is exempt from those requirements, does not have the force of law, and functions instead as the agency’s explanation of how it reads existing statutes. Thorn described the distinction as one that “matters enormously under the Administrative Procedure Act.” Courts are not legally bound to enforce interpretive rules the same way they are bound by legislative ones, which he says gives both the SEC and the industry room to adapt as circumstances change.
That flexibility is exactly what makes the guidance temporary.
The CLARITY Act and Its Complications
For the rules to hold beyond the current administration, the CLARITY Act — a crypto market structure bill — would need to be signed into law. It has not been. The bill stalled in January 2025 after objections from Coinbase and other industry participants who took issue with a prohibition on stablecoin yield, inadequate protections for open-source software developers, and provisions they argued would effectively dismantle the decentralized finance sector by requiring know-your-customer controls and reporting obligations on DeFi platforms.
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On Friday, a report emerged of a tentative deal between the White House and lawmakers to revive the bill. Details remain sparse. Senator Angela Alsobrooks confirmed the prospective agreement includes a ban on stablecoin yield from “passive balances,” but no further specifics have been disclosed.
Thorn’s assessment frames the SEC guidance as meaningful but provisional — an interpretive stance that explains the agency’s current reading of the law without locking that reading in for future administrations or future courts.
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial or investment advice.
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