Current outcome
The SEC staff's updated crypto FAQ now requires that a token system be both functional and have no central party for a buyback announcement to avoid being considered a promise of essential managerial efforts.
Progress timeline
4 material updates- #01
SEC crypto FAQ addresses token buybacks, network upgrades and promises of profit
SEC staff issued a crypto FAQ clarifying that promoting a network's current uses generally would not create an expectation of profit, while addressing how token buybacks and network upgrades bear on the securities analysis.
Source evidence: The Block · The Defiant · BeInCrypto · Decrypt · The Defiant · CryptoSlate
- #02
SEC staff’s staking-token split spotlights the exit risks behind staked ETH tokens - CryptoRank
SEC staff's staking-token split highlights exit risks for staked ETH tokens, raising regulatory questions about the classification and liquidity of liquid staking derivatives.
Source evidence: CryptoRank
- #03
Morning Minute: SEC Clears Token Buybacks for Crypto Networks
The SEC's Division of Corporation Finance updated its crypto FAQ to clarify that announcing a token buyback for a functional network does not represent 'essential managerial efforts' under the Howey test, alongside market items including a $2.39B BTC ETF inflow week and a Citi–Coinbase stablecoin partnership for institutions.
Source evidence: Decrypt · Cointelegraph
- #04
SEC changes token buyback guidance as spending hits $638M
SEC staff revised its token buyback FAQ on September 28, adding a 'no central party' condition that narrows the circumstances under which an issuer's buyback announcement is not deemed a commitment to manage token value.
State after update: The SEC staff's updated crypto FAQ now requires that a token system be both functional and have no central party for a buyback announcement to avoid being considered a promise of essential managerial efforts.
Source evidence: CryptoSlate