SEC: A simple promise can change the status of a crypto

The SEC brings new clarifications to the crypto market. In an FAQ published on September 25, its staff details the treatment of tokens, liquid staking, buyback programs and promises made by issuers. A crypto asset that is not itself a security can still be sold under an investment contract. It all depends in particular on what the issuer promises to buyers.

In brief

Crypto also depends on promises made to buyers

The SEC had already clarified in March the treatment of several categories of crypto-assets. The new answers go into more detail. They focus less on the name given to the token than on the conditions under which it is offered to investors.

Describing the functions already available on a network probably does not, by itself, constitute a promise of “essential managerial efforts.” A project can also mention future features without necessarily crossing this line. Especially when its discourse does not imply that these developments should generate profit for buyers.