The SEC has issued joint guidance with the CFTC to clarify how the securities laws apply to digital assets. The guidance acknowledges that the agency's "regulation by enforcement" campaign under Chair Gensler had muddied compliance obligations and stifled the industry. However, it fails to clarify the Howey test for “investment contract” securities, which defines when a digital asset is sold as part of an investment contract such that the sale becomes subject to securities laws. The SEC's new guidance also lacks clear guidelines on whether investment contract requires contractual obligations. The agency now recognizes that digital assets are not investment contracts, but remain “subject to contracts traded on secondary exchanges.