How Does the SEC’s Classification Affect the Ability to Trade Derivatives on That Crypto Asset?

If the SEC classifies a crypto asset as a security, any derivative based on that asset (e.g. a futures contract or option) becomes a security-based derivative. These derivatives fall under the SEC's jurisdiction and must comply with the securities laws, including registration, mandatory clearing, and specific trading venue requirements.

This is a much stricter regulatory regime than for derivatives on commodity-classified crypto assets (like Bitcoin futures, regulated by the CFTC).