The Securities and Exchange Commission (SEC) has issued guidance explaining how it will define cryptocurrencies as securities and how ?a “non-security” digital asset could meet certain conditions to become an investment contract. The SEC’s new interpretation classifies crypto tokens into five categories: ?digital commodities, digital collectibles, digital tools, stablecoins and digital securities. The agency specified that federal ?securities laws only apply to digital securities. SEC chair Paul Atkins also said the agency should consider a “safe harbor proposal” to give crypto companies and some tokens a regulatory carveout. Atkins said his safe harbor proposal was made up of a “startup exemption,” a “fundraising exemption,” and an “investment contract safe harbor.” He said: “It is past time for us to stop diagnosing the problem and start delivering the solution . . . Such a safe harbor would provide crypto innovators bespoke pathways to raise capital in the U.S., while providing appropriate investor protections.”