A group of major Layer-1 blockchain projects has formally urged the US Securities and Exchange Commission (SEC) to explicitly codify a “digital commodity” classification within its proposed regulatory framework.
In a joint comment letter addressed to SEC Secretary Vanessa A. Countryman, six prominent industry participants requested key modifications to the agency’s proposed “Regulation Crypto Assets” rule, which was published in the Federal Register on August 21, 2026.
The signatories include Nilmini Rubin of Hedera Hashgraph, Alex Mittendorf of Aptos Labs, Lee A. Schneider of Ava Labs, Candace Kelly of the Stellar Development Foundation, Nicolas Jacquemart of the Cardano Foundation and Benjamin Sherwin of Chainlink Labs.
The letter serves as a notable and coordinated industry response to the SEC’s ongoing rulemaking efforts, which have generally sought to put in place a workable regulatory framework for the digital assets industry while efforts in the US Congress to pass the CLARITY Act have moved forward slowly and are currently stalled.The group commended the Commission for its prior guidance – specifically the March interpretation titled Application of the Federal Securities Laws to Certain Types of Crypto Assets and Certain Transactions Involving Crypto Assets. However, the participants emphasised that moving the “digital commodity” distinction from the preamble of the proposal into the formal, operative rule text is essential to ensure long-term regulatory durability and market certainty.
The coalition highlighted the global nature of layer-1 blockchain networks, noting that development teams frequently choose where to operate based on the clarity of local regulations. They raised four primary issues and corresponding recommendations to resolve ambiguities in the current proposal:
1. Explicit Non-Security Status: The groups requested that the SEC formally define “digital commodity” within the text of the rule. Tracking the language of the March interpretation, they proposed that an asset be classified as a digital commodity if it derives its value from the programmatic operation of a functional system and supply dynamics, rather than the managerial efforts of others. Crucially, the amendment would establish that a digital commodity is not a security, even if it was previously subject to an investment contract.
2. Secondary Market Defaults: The participants argued for a clear default presumption regarding secondary market transactions. They asked the Commission to establish that a non-issuer’s offer or sale of a digital commodity on the secondary market does not involve an investment contract, provided there are no outstanding issuer promises of essential managerial efforts. Furthermore, they urged the SEC to grant class-wide exemptive relief for designated digital commodities without requiring a Form TR filing.
3. Voluntary Safe Harbors: Addressing industry fears that using the proposed Investment Contract Safe Harbor (Rule 400) could be viewed as a tacit admission of past securities violations, the coalition proposed adding a “No Inference” clause. This would ensure that filing a Form TR does not constitute an admission that an asset was ever subject to an investment contract, and that choosing not to rely on the safe harbor creates no negative presumption.
4. Inter-Agency Consistency: Finally, the letter called on the SEC to confirm in its final adopting release that the new regulations will not alter the 2026 baseline classifications or disrupt the respective jurisdictional authorities of the SEC and the Commodity Futures Trading Commission (CFTC).
The joint letter notes that several participants, including Ava Labs and Hedera, have previously submitted individual technical comments earlier in the autumn to address related functionality and regulatory concerns.
The coalition concluded by offering to meet with SEC staff to discuss these structural recommendations further before the final rules are formalised.
Relatedly, the SEC and CFTC recently jointly classified Bitcoin, Ether, Solana, Stellar, Tezos, and XRP as digital commodities, placing them under the CFTC’s regulatory oversight rather than the SEC’s.
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