Do you wonder whether the latest crypto rules from U.S. regulators will stick, or if they might disappear tomorrow? This article explains how agencies like the SEC and CFTC create regulations, why those rules can be challenged or rolled back, and what the process means for anyone trying to earn online through crypto.
What regulatory rulemaking actually is
In the United States, agencies such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are given authority by Congress to fill in the details of broad statutes. The Securities Exchange Act of 1934, for example, gives the SEC power to write rules that explain how the law applies to new financial products. These rules are called agency regulations and they have the force of law, as long as the agency stays within the limits set by the enabling statute.
When a regulator issues a rule, it typically follows a formal process: a notice of proposed rulemaking is published, the public can submit comments, and the agency then issues a final rule. Once published in the Federal Register, the rule becomes binding unless it is amended, repealed, or successfully challenged in court.
Two key concepts are important for anyone earning crypto online:
- Exemptions and classifications – Agencies decide whether a token is a security, a commodity, or something else. That classification determines which set of rules applies.
- Enforcement scope – Rules may require licensing, custody standards, or reporting obligations that affect how platforms operate and how users can earn rewards.
Why rules can be overturned
Agency regulations are not immutable. They can be changed in three main ways:
- Agency action – The SEC or CFTC can amend or repeal a rule through the same notice‑and‑comment process used to create it.
- Congressional action – Congress can pass new legislation that overrides an agency’s interpretation.
- Judicial review – Courts can strike down a rule if they find the agency exceeded its statutory authority, failed to follow required procedures, or issued a rule that is “arbitrary and capricious.”
A 2024 Supreme Court decision (Loper Bright) limited the deference courts traditionally gave to agencies under the 1984 Chevron doctrine. After Loper Bright, judges are more willing to evaluate an agency’s interpretation on their own, rather than automatically accepting it. This makes it easier for a party to successfully argue that a rule was improperly crafted.
Real‑world illustration
In October 2026, the SEC and CFTC announced a suite of pro‑crypto rules after a Senate vote on the CLARITY bill failed. The SEC granted a five‑year exemption for issuing and trading “stock tokens,” clarified that token buy‑backs do not automatically make a token a security, and said liquid‑staking tokens are not securities. Meanwhile, the CFTC created a new “crypto asset market” registration category and exempted certain software providers from registration.
Legal analysts immediately noted that agency rules are “the easiest to rescind,” citing past instances where a change in administration led to rapid rollbacks of previous policies. The same analysts pointed to the Loper Bright decision as a factor that could make it more likely for courts to overturn these new rules if challenged.
What this means for you
If you are earning passive income through tokenized stocks, staking, or leveraged crypto trading, the regulatory environment directly affects the platforms you use and the safety of your earnings. A rule that classifies a token as a security could require a licensed broker‑dealer, potentially increasing fees or limiting access. Conversely, an exemption that treats a token as a non‑security can open up new earning opportunities but may also reduce investor protections.
Because regulations can change, any business model built on a specific rule carries some risk. If a court later strikes down the rule, platforms may need to adjust quickly, which could disrupt payouts, freeze assets, or force users to migrate to other services.
How to evaluate regulatory risk
When assessing a crypto earning opportunity, consider these concrete steps:
- Check the source of the rule – Identify whether the guidance comes from the SEC, CFTC, or another agency, and read the original Federal Register notice if possible.
- Look for legal challenges – Search for pending lawsuits or recent court decisions that mention the rule. Ongoing litigation can be a warning sign of instability.
- Assess the rule’s durability – Rules that rely on broad agency discretion (e.g., “liquid‑staking tokens are not securities”) are more vulnerable to reversal than those grounded in specific statutory language.
- Monitor agency leadership – Changes in the chair or commissioner roster often signal shifts in regulatory philosophy.
- Diversify your earning methods – Relying on a single token classification or platform reduces exposure to regulatory shocks.
FAQ
Will the SEC’s exemption for stock tokens stay in place?
The exemption is a rule that can be amended or repealed by the SEC through the standard notice‑and‑comment process, or it could be challenged in court. Its longevity depends on how the agency balances industry feedback with legal scrutiny.
What is the “Howey test” and why does it matter?
The Howey test, from a 1946 Supreme Court case, determines whether an asset is a security based on four criteria: an investment of money, a common enterprise, an expectation of profit, and reliance on the efforts of others. Regulators use this test to decide how to classify tokens. If a court reinterprets the test, many existing classifications could change.
Can a platform stop offering a service if a rule is overturned?
Yes. If a rule that allowed a particular activity is struck down, the platform may need to cease that service until it obtains the appropriate licenses or adjusts its model, potentially affecting users’ earnings.
How can I protect my earnings from regulatory uncertainty?
Spread your activities across multiple platforms and asset types, keep a portion of your holdings in assets that are less likely to be re‑classified (e.g., established cryptocurrencies), and stay informed about regulatory developments through reliable legal analysis.
This article references reporting from cointelegraph.com.
