The implementation of the regulatory action was announced last night when the SEC released the final explanatory guidance titled "Applicability of Federal Securities Laws to Certain Types of Cryptocurrency Assets and Certain Transactions Involving Cryptocurrency Assets". This is the clear guidance provided by the SEC in conjunction with the CFTC on the long-term framework for regulating cryptocurrency assets, ending the previous model of "regulating through law enforcement" and further enhancing the regulatory sentiment we expect in the cryptocurrency industry. Core points of guidance 1. For the first time, the classification of encrypted assets is clearly divided into five categories: 1) Digital Commodities Clearly state that encrypted assets such as BTC, ETH, SOL, XRP, ADA, DOGE, SHIB, AVAX, LINK, etc. are digital commodities and not securities. Their value mainly comes from functional network operations and supply and demand. 2) Digital Collectibles NFT artworks, meme coins, CryptoPunks, etc. are not considered securities and mainly have artistic/social/collectible value. 3) Digital Tools Such as ENS domain names, utility certificates, tickets, etc. - do not belong to securities and provide actual functions. 4) Stablecoins: Payment stablecoins, as defined by the GENIUS Act, issued by licensed issuers are not considered securities; 5) Digital Securities Digital securities/tokenized securities tokenized stocks, bonds, etc. still belong to securities When will non securities encrypted assets become/cease to be investment contracts (Howey Test application) 1) When an issuer induces investors to reasonably expect profits by promising "essential managerial efforts" (development features, milestones, use of funds, etc.), non securities assets can be considered as investment contracts (i.e. securities). 2) Once the issuer fulfills its commitments and the investment contract relationship terminates, the asset is no longer subject to securities laws. This is a significant shift. In the past, the SEC often considered "always securities", which means that at the beginning of ICO or private placement, they were considered securities. However, if the tokens are fully unlocked and the degree of community is high, they will no longer be considered securities. 3. Several common types of on chain activities are explicitly classified as non securities (when conditions are met): 1) PoW mining, including mining pools that are non securities; 2) Protocol staking PoS staking (including self staking, custodial staking, liquidity staking/liquid staking) is not a security, as long as it operates according to protocol rules, does not guarantee returns, and does not lend assets. 3) Staking Receipt Tokens, such as stETH, are non securities if they correspond to underlying non securities assets in a 1:1 ratio and automatically reflect rewards according to the agreement. 4) Wrapping/Wrapped Tokens are cross chain wrappers, and if they are 1:1 redeemable, have no return commitment, and are not pooled, they are also considered non securities. 5) Airdrops airdrop: If there is no consideration (no money, no services/goods provided), it does not meet Howey's "investment of money" requirement and is not a security. As an explanatory rule, this guideline takes immediate effect. It can be said that cryptocurrency regulation has played a significant role, providing a relatively clear "non securities" status for platforms such as Ethereum, mainstream Layer1, mainstream staking, mainstream NFTs, and mainstream airdrops, while retaining regulatory space for fraudulent issuances and ongoing commitment projects.