SEC Issues New Crypto Guidance, Clarifies When Tokens Fall Under Securities Laws

The U.S. SEC has released new guidance explaining when crypto assets and related activities can fall under federal securities laws. The update covers token sales, staking receipt tokens, buybacks, and network upgrades. 

This gives crypto firms clearer guidance on when a token may be tied to an investment contract under the Howey test.

When Crypto Assets Can Become Investment Contracts

The SEC’s Division of Corporation Finance issued the guidance on September 25, building on its March 2026 Interpretive Release.

The SEC said a crypto asset may be treated as part of an investment contract when buyers invest money with the expectation of profits from the essential managerial efforts of others. This is based on the Howey test, which courts use to determine whether an arrangement qualifies as an investment contract.

Simply promoting a crypto network’s current uses or future features would generally not be enough, especially when the statements do not mention potential profits.

However, the situation can change when an issuer makes clear promises about future work and links those efforts to potential profits for buyers. The SEC said such statements could create a reasonable expectation of profit.