SEC Clarified Token Buyback FAQ: "No Central Party"

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Three days after telling the market that announcing a token buyback carries no promise of managerial effort, SEC staff added four words to the answer: “and has no central party.” The assurance now reaches only systems that are functional and have nobody in control of them.

The Division of Corporation Finance's revised answer to Question 2.5 leaves the rest of the text alone, and the SEC's own version comparison marks the addition and dates it Sept. 28. Under the Commission's March interpretation, a central party is a person, entity or group with operational, economic or voting control of a crypto system. Issuers who still hold that control can no longer point at functionality alone.

Hester Peirce had already said as much on X on Sept. 25: if you have a central party, you cannot rely on this FAQ. a16z crypto's Miles Jennings argued at the time that the limit lived in Question 2.4 and never in the buyback answer, then welcomed the amendment on Sept. 28 as a guard “against attempts to misconstrue it.” The FAQs still bind nobody. What changed is how many issuers can quote them.

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