Nasdaq has formally called on the U.S. Securities and Exchange Commission (SEC) to create a consistent classification system for crypto assets, highlighting the urgent need for regulatory clarity as the digital asset market evolves.
In a 23-page letter to the SEC’s Cryptocurrency Task Force, the American exchange operator proposed a detailed taxonomy to determine which regulatory body should oversee different types of digital assets.
Nasdaq Proposes a Four-Tier Classification Model
Nasdaq’s proposal divides digital assets into four categories:
- Financial securities
- Digital asset investment contracts
- Digital asset commodities
- Other digital assets outside existing definitions
The exchange argued that this framework would clarify the division of authority between the SEC and the Commodity Futures Trading Commission (CFTC), depending on the asset’s nature.
“While a stock by any other word would still be a stock, the existing market ecosystem can readily absorb digital assets by establishing the proper taxonomy and calibrating certain rules to reflect what is truly new and novel about digital assets,” Nasdaq stated in the letter.
Specific Regulatory Recommendations
According to Nasdaq:
- Assets classified as financial securities, such as tokens tied to stocks, bonds, or ETFs, should be regulated by the SEC.
- Investment contracts meeting an updated version of the Howey Test should also fall under the SEC’s jurisdiction.
- Commodities should be overseen by the CFTC.
- Digital assets not fitting these categories should be exempt from traditional securities or commodities regulations.
John Zecca, Nasdaq’s Chief Regulatory Officer, emphasized that digital assets resembling traditional securities must be treated in accordance with existing financial rules. He also advocated for a crossover designation for trading platforms that handle multiple types of digital assets.
Nasdaq pointed out that its global infrastructure already supports trading, surveillance, and clearing services for digital assets across six continents.
Enhanced Oversight for Vertically Integrated Crypto Firms
Beyond classification, Nasdaq suggested that regulators implement stricter oversight for vertically integrated crypto firms that control issuance, trading, and custody within a single organization.
The letter was submitted in response to SEC Commissioner Hester Peirce’s request for industry feedback on future crypto regulatory frameworks.
SEC Signals a Shift Toward Structured Crypto Rules
As Nasdaq pushes for clearer guidelines, regulatory momentum in Washington is building toward a broader overhaul of crypto asset regulation. SEC Commissioner Mark Uyeda recently announced a shift away from the agency’s previous enforcement-heavy strategy, favoring a more collaborative regulatory approach.
In an interview with CNBC during the World Bank and IMF Spring Meetings, Uyeda confirmed the formation of a new SEC crypto task force aimed at developing clear and cost-effective rules. He acknowledged that prior aggressive enforcement actions had driven many crypto firms offshore and stifled innovation.
New Focus on Industry Engagement
The SEC is now actively collaborating with the White House and Treasury through joint crypto and AI task forces. It is also hosting public roundtables, with the first session focusing on the application of the Howey Test to digital assets – a key point of legal ambiguity.
New SEC Chairman Paul Atkins has pledged to prioritize digital asset regulation, promising a “principled” approach designed to ensure that the U.S. remains a global leader in crypto innovation.
