SEC & CFTC Offer Crypto Guidance, Kalshi Faces Legal Battles

Regulators aim to clarify crypto asset classifications, but uncertainty remains as some businesses face enforcement actions.

Mar. 23, 2026 at 3:50am

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This week, the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) issued joint guidance to clarify which crypto assets are considered securities. Meanwhile, prediction platform Kalshi is facing legal challenges in multiple states over its event-based contracts. The evolving regulatory landscape is creating both opportunities and anxieties for the crypto industry, as lawmakers consider potential legislation to provide lasting clarity.

Why it matters

The SEC and CFTC guidance represents the most specific attempt yet to define how existing securities laws apply to digital assets. However, the line between commodities and securities remains blurred, and the Kalshi cases highlight the ongoing tension between innovative financial products and existing regulations. The industry is pushing for comprehensive legislation to provide a clear regulatory framework, while legislators aim to prioritize consumer protection measures.

The details

The SEC and CFTC's guidance categorizes crypto assets, with digital securities being those that meet the definition of a security under existing law. Other categories, such as payment stablecoins, digital tools, and digital commodities, are generally not considered securities. However, the agencies warned that issuers could bring certain assets under securities laws through actions like fractionalizing the tokens. Meanwhile, prediction platform Kalshi is facing legal battles in Arizona and Nevada, with authorities alleging illegal gambling activities related to its election and event-based contracts. Kalshi's co-founder has called the charges a "complete overstep."

  • The SEC and CFTC issued their joint guidance this week.
  • Arizona's Attorney General has filed criminal charges against Kalshi.
  • Nevada has temporarily banned Kalshi from offering certain contracts, pending a hearing.

The players

Securities and Exchange Commission (SEC)

The U.S. government agency responsible for regulating the securities industry, including stocks and other financial products.

Commodity Futures Trading Commission (CFTC)

The U.S. government agency that regulates the commodity futures and options markets, including cryptocurrencies.

Kalshi

A prediction platform that allows users to trade contracts based on the outcome of future events, such as elections or sports.

Tarek Mansour

The co-founder of Kalshi.

Troy Downing

A Republican Congressman from Montana who has emphasized the need for Congress to pass market structure legislation to provide lasting clarity for the crypto industry.

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What they’re saying

“We must not let individuals continue to damage private property in San Francisco.”

— Robert Jenkins, San Francisco resident

“Fifty years is such an accomplishment in San Francisco, especially with the way the city has changed over the years.”

— Gordon Edgar, Grocery employee

What’s next

Discussions are underway in Congress regarding potential legislation, including addressing issues related to stablecoin regulation, ethics, and quorum requirements for regulatory agencies. Senator Cynthia Lummis (R-Wyo.) predicted a revised bill could emerge in late April, potentially resolving the issue of stablecoin yields through an agreement preventing issuers from using banking terminology.

The takeaway

The current regulatory landscape suggests increased scrutiny from the SEC and CFTC, a continued push for legislative clarity, and a focus on consumer protection measures. However, the potential for conflicts between state and federal regulations, as seen in the Kalshi cases, highlights the need for a comprehensive and harmonized approach to crypto asset regulation.