Nasdaq Urges SEC to Apply Same Regulatory Standards to Digital Assets as Securities

The exchange said the US financial regulator needs to establish a clearer taxonomy for cryptocurrencies, including categorizing a portion of digital assets as “financial securities.”

Nasdaq is urging the US Securities and Exchange Commission (SEC) to subject digital assets to the same regulatory standards as traditional securities if they constitute "stocks by any other name."

In an April 25 comment letter to the SEC, the exchange said the US financial regulator needs to establish a clearer taxonomy for cryptocurrencies, including categorizing a portion of digital assets as "financial securities." Those tokens should continue to be regulated "as they are regulated today regardless of tokenized form," Nasdaq argued.

"Whether it takes the form of a paper share, a digital share, or a token, an instrument's underlying nature remains the same and it should be traded and regulated in the same way," the letter said.

It also proposed categorizing a portion of cryptocurrencies as "digital asset investment contracts," to be subject to "light touch regulation" but still overseen by the SEC.

The exchange said these tokens, which may be subject to minimal US regulatory oversight, could include memecoins such as SHIB and PEPE, which the SEC has previously said do not qualify as investment contracts if they are clearly identified as purely speculative assets with no intrinsic value.

"Congress intended the term 'investment contract' to encompass broadly any instrument that is sold on the basis of a common enterprise or a promise of profit to be paid by a third party," Nasdaq said.

"Instruments sold on the basis of such promises should continue to be subject to Section 7 of the Securities Act, which applies to offers and sales of securities, and instruments sold on some other basis should not," it added.

The exchange's recommendations come as the SEC has dramatically pivoted its stance on cryptocurrency oversight since US President Donald Trump took office in January.

Under the leadership of former Chair Gary Gensler, the SEC took the position that practically all cryptocurrencies, with the exception of Bitcoin (BTC), represent investment contracts and therefore qualify as securities. This stance led the agency to bring upwards of 100 lawsuits against crypto firms for alleged securities law violations.

However, under Trump nominee Paul Atkins, who was sworn in as chair on April 21 after a lengthy Senate confirmation, the SEC has claimed jurisdiction over a narrower segment of cryptocurrencies.

In February, the agency issued guidance stating that memecoins — if clearly identified as purely speculative assets with no intrinsic value — do not qualify as investment contracts pursuant to US law.

In April, the SEC said that stablecoins — digital tokens pegged to the US dollar — similarly do not qualify as they are marketed solely as a means of making payments.

Nasdaq said existing financial infrastructure "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."

The Depository Trust & Clearing Corporation (DTCC) — a private US securities clearinghouse closely overseen by the SEC — has been laying the foundation for integrating blockchain technology into regulated financial markets. In March, the DTCC committed to promoting Ethereum's ERC-3643 standard for permissioned securities tokens.