SEC Staff Clear Token Buybacks on Working Networks, With a Warning for Unfinished Ones

New FAQs from the SEC’s Division of Corporation Finance also say some liquid staking tokens can count as digital commodities and that funding upgrades to a working network isn’t the kind of effort that makes a token a security.

SEC staff clear token buybacks on working networks, warn unfinished ones

Posted September 25, 2026 at 8:05 pm EST.

More crypto projects are using revenue to buy back their own tokens, the way public companies repurchase stock. Ethena proposed a buyback program in late August. What those teams lacked was a clear answer on whether announcing one could make their token look like a security.

The SEC’s Division of Corporation Finance gave one on Friday. Where a crypto system is functional, the staff wrote in the FAQs, “an issuer’s announcement of a non-security crypto asset buyback program would not constitute a representation or promise to undertake essential managerial efforts.” That kind of promise is what can turn a token sale into an investment contract under the Howey test.

The answer has a limit. On a network that isn’t yet functional, the staff warned, the same announcement could cross the line “if the issuer presents the buyback as creating yield or return for token holders.”