Nasdaq Advocates SEC Regulation of Digital Assets as Stocks, Seeks Classification Framework

**# Nasdaq Proposes SEC to Classify Certain Digital Assets as Financial Securities** The Nasdaq Stock Exchange has submitted a significant proposal to the U.S. Securities and Exchange Commission (SEC), urging the classification of certain digital assets, often known as virtual assets, as financial securities. In a comment letter filed with the SEC on October 25, Nasdaq recommended that digital assets with characteristics akin to traditional equities be subject to the same regulatory standards, labeling them as "stocks by any other name." The exchange underscored the importance of a distinct classification framework for digital assets, advocating for the designation of some assets as financial securities. **# Same Rules for Similar Assets** Nasdaq asserted that assets sharing the same fundamental attributes, whether they appear as paper stock, digital stock, or tokens, should be regulated and traded under identical standards. Nonetheless, Nasdaq proposed a "light touch regulation" approach for these digital assets. The letter detailed that the existing financial infrastructure is capable of incorporating digital assets, provided there is a well-defined classification system. It also suggested tailoring certain regulatory rules to better suit the unique characteristics of digital assets. **# Preparations for Digital Asset Integration** The SEC has already been preparing for the integration of digital assets into the U.S. financial system. The Depository Trust & Clearing Corporation (DTCC), a subsidiary of the SEC, is actively developing infrastructure to support these assets. Last month, the DTCC announced its plans to adopt and promote the Ethereum ERC-3643 standard for permissioned security tokens, signaling progress toward compatibility with blockchain technology. **# Shift in SEC Policy Under New Leadership** A notable shift in the SEC’s approach to digital assets has occurred under the Trump administration, departing from the policies under former Chair Gary Gensler. Gensler's SEC had classified most digital assets—excluding Bitcoin(BTC)—as investment contracts, effectively treating them as securities. This led to over 100 lawsuits against digital asset firms for alleged securities law violations. Under the new leadership of SEC Chair Paul Atkins, the commission has taken a more lenient stance on digital assets. For instance, speculative meme coins have been determined not to meet the criteria of investment contracts under U.S. law. Additionally, dollar-pegged stablecoins have not been classified as securities when marketed strictly as payment tools. The SEC's evolving viewpoint on digital assets demonstrates ongoing efforts to achieve a regulatory balance, ensuring investor protection while promoting innovation within the rapidly evolving blockchain-based financial sector.