The question of which cryptocurrencies are securities doesn’t have a single clean answer, because the Securities and Exchange Commission has never published an official list. Instead, the agency has named specific tokens as securities inside enforcement lawsuits, and courts have ruled on a handful of them. Between 2023 and early 2025, the SEC alleged that at least ten major altcoins were unregistered securities. Then in 2025 the agency dismissed the lawsuits carrying most of those allegations and launched a task force to rewrite the rules. Bitcoin, Ethereum, and certain dollar-pegged stablecoins sit outside the securities framework. Nearly everything else lives in a gray zone while regulators and Congress sort out a permanent framework.
Tokens the SEC Has Named as Securities
In its June 2023 lawsuit against Binance, the SEC alleged that the following tokens were unregistered securities being offered through the platform:
- Solana (SOL)
- Cardano (ADA)
- Polygon (MATIC)
- Filecoin (FIL)
- Cosmos (ATOM)
- The Sandbox (SAND)
- Decentraland (MANA)
- Algorand (ALGO)
- Axie Infinity (AXS)
- COTI
A parallel lawsuit against Coinbase made similar allegations about several tokens listed on that exchange.1U.S. Securities and Exchange Commission. SEC Announces Dismissal of Civil Enforcement Action Against Coinbase Inc. and Coinbase Global Inc.
XRP was the subject of the longest-running fight. A federal judge ruled in 2023 that Ripple’s direct sales of XRP to institutional investors were unregistered securities, while sales to anonymous buyers on public exchanges were not. Ripple was originally ordered to pay $125 million, but under a 2025 settlement the SEC accepted $50 million and both sides dropped their appeals.2U.S. Securities and Exchange Commission. Ripple Labs, Inc., Bradley Garlinghouse, and Christian Larsen – Litigation Release
Terraform Labs produced the largest penalty. After a jury found the company and founder Do Kwon liable for fraud involving crypto assets sold as securities, they agreed to pay more than $4.5 billion in disgorgement, interest, and penalties.3U.S. Securities and Exchange Commission. SEC Announces Enforcement Results for Fiscal Year 2024
The 2025 Reversal and What It Means for That List
Under new leadership in early 2025, the SEC changed course. The agency created a Crypto Task Force led by Commissioner Hester Peirce with a mandate to draw clearer regulatory lines and distinguish securities from non-securities going forward.4U.S. Securities and Exchange Commission. Crypto Task Force
In February 2025, the SEC dismissed its lawsuit against Coinbase, stating the dismissal was meant to “facilitate the Commission’s ongoing efforts to reform and renew its regulatory approach to the crypto industry” and was not based on any assessment of the merits.1U.S. Securities and Exchange Commission. SEC Announces Dismissal of Civil Enforcement Action Against Coinbase Inc. and Coinbase Global Inc. The agency then dropped the Binance case in mid-2025, after first amending the complaint to remove the allegations that Solana, Cardano, Polygon, and the other listed tokens were unregistered securities.
So the practical status today: the SEC has stopped actively claiming those altcoins are securities, but it has not declared them non-securities either. The dismissals removed immediate legal exposure without creating permanent safe harbors, and a future SEC could revive similar theories. Terraform’s assets were adjudicated as securities and that verdict stands. Ripple’s institutional XRP sales remain classified as unregistered securities under the court’s order.
Cryptocurrencies That Are Not Securities
Bitcoin
Bitcoin is the clearest non-security. No individual or organization controls the network, no central issuer sold tokens to fund development, and no one promises returns to participants. The SEC approved spot Bitcoin exchange-traded products in January 2024, describing Bitcoin as a “non-security commodity” in the approval statement.5U.S. Securities and Exchange Commission. Statement on the Approval of Spot Bitcoin Exchange-Traded Products Bitcoin falls under the jurisdiction of the Commodity Futures Trading Commission for derivatives.
Ethereum
Ethereum’s position is less formally resolved, but it has been treated as a commodity in practice. The SEC approved spot Ethereum ETFs in July 2024. The agency never issued a formal declaration that Ethereum is not a security, though approving an ETF would be difficult to reconcile with classifying the underlying asset as an unregistered security. The network’s transition to proof-of-stake raised questions about whether staking changes the analysis, but no enforcement action has followed.
Covered Stablecoins
In April 2025, the SEC’s Division of Corporation Finance issued guidance stating that certain stablecoins do not involve the offer or sale of securities. The agency defined “covered stablecoins” as those pegged one-to-one to the U.S. dollar, redeemable at face value, and backed by low-risk, liquid reserves. Because buyers use these stablecoins as digital dollars rather than purchasing them with an expectation of profit, they fail the Howey test.6U.S. Securities and Exchange Commission. Statement on Stablecoins
This guidance has limits. It reflects staff views rather than a formal rule, and only applies to stablecoins meeting the specific criteria. Algorithmic stablecoins that hold their peg through code rather than reserves, and stablecoins that pay yield to holders, could still face security classification.
How the Same Token Can Be a Security in One Sale and Not Another
The Ripple ruling established a principle that applies well beyond XRP: the same token can be a security in one transaction and not in another. The court held that Ripple’s direct sales to institutional investors were unregistered securities because those buyers understood they were funding Ripple’s business and expected Ripple to increase XRP’s value. But the court reached the opposite conclusion for sales on public exchanges, where buyers didn’t know whether their money went to Ripple or some random seller. Those “programmatic sales” failed the Howey test because the connection between the buyer’s money and Ripple’s efforts was too attenuated.7US District Court Southern District of New York. SEC v. Ripple Labs, Inc., et al. – Order
How and where a token trades can matter as much as the token’s design. A token sold through a private fundraising round to venture capital firms looks far more like a security than the same token purchased anonymously on a public exchange years later.
The Howey Test
Every classification question ultimately runs through a test from the Supreme Court’s 1946 decision in SEC v. W.J. Howey Co. A transaction is an investment contract, and therefore a security, when four elements are present:
- Someone invests money
- The investment goes into a common enterprise
- The investor reasonably expects to earn profits
- Those profits depend primarily on the work of others
If a token meets all four elements, federal securities law applies regardless of what the creator calls it. A project can label its token a “utility token” or “governance token,” but regulators look past the name to the economic reality of the arrangement.8Legal Information Institute. Howey Test
The element that trips up most crypto projects is the “efforts of others” prong. When a centralized development team controls the protocol’s roadmap, manages the token supply, and runs marketing campaigns to attract buyers, regulators see a structure that resembles a traditional securities offering. The concept of “sufficient decentralization” matters here: if a core team can unilaterally push upgrades, burn tokens to create scarcity, or redirect treasury funds, that concentration of control strengthens the case for security classification. Marketing materials that highlight expected returns, compare tokens to stocks, or emphasize the team’s credentials have all been cited as evidence that buyers are investing rather than purchasing a tool they plan to use.
Staking and Airdrops
Staking-as-a-service has its own history. In 2023, the SEC charged Kraken with offering unregistered securities through its staking program, resulting in a $30 million settlement and a permanent injunction against operating the program in the United States.9U.S. Securities and Exchange Commission. Kraken to Discontinue Unregistered Offer and Sale of Crypto Asset Staking-As-A-Service Program and Pay $30 Million to Settle SEC Charges
The SEC softened its stance in 2025 with new guidance. Under the updated framework, a custodian that simply follows the asset owner’s instructions about whether, when, and how much to stake is performing “administrative or ministerial” work, not the kind of managerial effort that triggers the Howey test. But if the custodian makes those decisions independently, or guarantees a fixed reward rate, the arrangement moves closer to a security.10U.S. Securities and Exchange Commission. Statement on Certain Protocol Staking Activities
Airdrops are not automatically exempt from securities law just because recipients don’t pay cash. The SEC has argued that claiming free tokens often requires effort that benefits the issuer, such as paying transaction fees, creating accounts, or generating network activity that increases the token’s visibility. In the case against Justin Sun, the agency alleged that airdrops of the BitTorrent token were unregistered offerings because the campaigns promoted the ecosystem and drove up demand. Where the primary purpose of a distribution is to build hype and increase trading volume, regulators may treat it as a securities transaction.
What Classification Actually Does
When a token is classified as a security, the consequences reach the whole ecosystem around it. Issuers must register with the SEC and provide ongoing disclosures, including audited financial statements and material updates about the project. Platforms that list the token need broker-dealer registration. Exchanges that are not registered as securities exchanges face enforcement risk for facilitating trades in unregistered securities.11U.S. Securities and Exchange Commission. Registration Under the Securities Act of 1933
Penalties for issuers who sell unregistered securities have varied widely. Kraken paid $30 million for its staking program. Terraform Labs owed $4.5 billion after a fraud verdict. Ripple’s penalty was negotiated down from $125 million to $50 million. Beyond fines, the SEC can obtain injunctions that permanently bar individuals from serving as officers or directors of public companies, and platforms that list unregistered securities risk losing access to the U.S. market.
Legislation That Could Replace the Case-by-Case Approach
Congress is working on legislation that could replace enforcement-driven classification with a statutory framework. The Senate Banking Committee announced a markup of comprehensive digital asset market structure legislation scheduled for January 2026, aiming to “establish clear rules of the road for digital assets.”12Senate Banking Committee. Chairman Scott Announces Digital Asset Market Structure Markup
The GENIUS Act of 2025 targets stablecoins specifically. The bill would create a federal licensing framework for stablecoin issuers while allowing issuers with a market capitalization under $10 billion to opt into state-level regulation instead, provided the state regime is substantially similar to the federal requirements.13U.S. Congress. S.394 – GENIUS Act of 2025
If market structure legislation passes, it would likely define criteria for when a digital asset falls under SEC jurisdiction versus CFTC jurisdiction, something no statute currently does. Projects could know in advance which regulator oversees them, rather than finding out through a lawsuit.