The US SEC has released new guidance on the classification of crypto assets. Howey Test has been expanded to include DeFi and stablecoins.

🕘 Release Date: October 13, 2025

📍 Source: BrokerHiveX Crypto Regulation

🏛 Category: Crypto Regulation | Blockchain Policy | US Finance

1. Background: SEC Updates Definition of “Crypto-Asset Securities”

In October 2025, the U.S. Securities and Exchange Commission (SEC) officially released a report called
The guidance document for the Digital Asset Securities Framework 2025 ,
New interpretations and expansion standards are proposed for whether crypto assets constitute securities.

The document clearly states:

“Any cryptoasset where investors expect to earn an economic return through the efforts of others should be considered a security.”

This move is seen as a significant extension of the classic Howey Test .
Especially for DeFi protocol tokens, stablecoins and yield-based staking assets (Yield Token) .

2. Core Content: Four Standard Extensions of the Howey Test

In the new version of the document, the SEC still retains the traditional four standards of the Howey Test, but adds supplementary explanations.

The SEC emphasized that decentralization is no longer an exemption condition .
As long as there is "key management, revenue commitment or technical control",
may be deemed securities.

3. Affected Scope: Stablecoins and DeFi are the first to be affected

The document specifically mentions three categories of key regulatory targets:

1. Yield-bearing Stablecoins

If stablecoins generate interest income through algorithms or staking mechanisms, they will be classified as securities.

2️⃣ DeFi Liquidity Tokens

If users can obtain profit sharing through LP tokens, it constitutes an investment contract.

3️⃣ Staking Products

If the platform centrally manages user pledges and distributes returns, it may constitute a "collective investment plan."

SEC Director Gary Gensler stated:
“The goal of regulation is not to prevent innovation, but to ensure that investors receive the same protections as in traditional markets.”

IV. Market Reaction and Price Impact

Major US exchanges (Coinbase, Kraken, Gemini)
After the guidance was issued, some DeFi token trading pairs were temporarily delisted, including:

• UNI (Uniswap)

• AAVE (Aave)

• CRV (Curve)

• MKR (MakerDAO)

Short-term volatility in the crypto market:

• BTC fell 2.1% to $63,500 at one point;

• ETH fell 3.4% to $2,480;

• The overall market value of the DeFi sector shrank by 5.2%.

5. Regulatory Perspective: The Boundary Between the SEC and the CFTC Blurs Again

The release of this guidance document once again triggered discussions on the "dual management" of US regulation.

Academics believe that this guidance provides the SEC with greater power of interpretation in the field of DeFi regulation.

VI. International Comparison: Regulatory Differences between the United States and Other Major Jurisdictions

The US approach is closer to " definition first, enforcement later ".
This means that the project party must prove that it is not a security.

7. Industry Impact: Compliance Challenges for Project Owners and Exchanges

1️⃣Project parties face increased compliance pressure

• Newly issued tokens are required to undergo a “self-assessment”

• If financing or token incentives are provided through SAFT, SEC registration or exemption application must be submitted

2️⃣Exchanges need to reclassify listed assets

• Coinbase has said it will review the legal status of about 80 tokens

• Non-compliant tokens may be moved into the “grey market”

3️⃣Investor education and legal transparency

• Investors need to understand the governance and profit mechanisms behind tokens

• The law firm recommends that the project adopt a "practical statement + public white paper update" mechanism

8. Future Outlook: A New Phase of Global Crypto Regulation

The SEC’s new guidance means:

• The crypto industry is entering an institutionalized regulatory cycle ;

• Compliance costs are rising, but market trust is also increasing;

• DeFi and stablecoins may be included in a unified regulatory sandbox in the future.

Morgan Stanley's blockchain research department believes:

“By 2026, 70% of the world’s mainstream tokens will be tested for securities attributes.”

🔗 References

• SEC – Digital Asset Securities Framework (2025)

• Reuters – SEC issues new guidance for crypto asset securities classification (2025)