SEC Issues FAQs Clarifying Crypto Asset Classification, Staking Receipts, and Buybacks

The staff of the Securities and Exchange Commission’s Division of Corporation Finance published a new set of frequently asked questions on September 25 clarifying how federal securities laws apply to crypto assets. The guidance, released in a document on the SEC’s website, follows the Commission’s March 17 interpretive release and the August 18 Regulation Crypto Assets proposal, and it answers specific questions on asset classification, staking receipt tokens, wrapped tokens, and issuer buybacks.

How the SEC classifies staking receipts and wrapped tokens

The FAQs clarify how the Commission’s classification framework treats receipt-style instruments. A Staking Receipt Token that represents a digital commodity free of an investment contract is itself a digital tool, because it serves the practical function of evidencing the holder’s ownership of the underlying asset. The staff adds that a Staking Receipt Token can also be classified as a digital commodity when a protocol-based liquid staking provider issues it, since its value then derives from the operation of a functional crypto system.

The guidance separates a receipt from other financial instruments. A receipt certifies that an asset has been deposited and does not change the holder’s rights, and the issuer cannot transfer, lend, pledge, or rehypothecate the deposited asset. Redeemable Wrapped Tokens are treated the same way, the staff notes.