Morning Minute: SEC Clears Token Buybacks for Crypto Networks

GM!

Today’s top news:

• Crypto majors fall overnight after big weekly close; BTC -2% at $83k
• SEC updates FAQs and clears token buybacks for crypto protocols
• Citi partners with Coinbase for stablecoin support for institutions
• BTC ETFs close a $2.39B inflow week, 7-straight green days
• Pump flips Hyperliquid in revenue on week (PUMP +11%)

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24h LowLow$82,581

VolVol$1.4B

Market projectionsOdds by Myriad

⚖️ SEC Clears Token Buybacks for Crypto Networks

The SEC’s Division of Corporation Finance updated its crypto FAQ Friday with the most consequential line it has written all year. Once a network is functional, announcing a token buyback does not amount to a promise of “essential managerial efforts.”

The Howey test asks whether you're buying something expecting a company to work and make you rich. If yes, it's a security. The SEC just said announcing a buyback isn't that kind of promise. It’s a huge deal for protocols who have essentially been in limbo ever since the prior administration’s war on crypto.

The staff went further. Maintaining, upgrading, or growing a functional network doesn’t satisfy Howey either. Neither does promoting what a network currently does, or making vague aspirational statements that don’t tout profit. Gabriel Shapiro, a securities attorney at MetaLeX Labs and former general counsel at Delphi Labs, said the buyback section “goes further than I expected” and that securities laws are starting to look opt-in as the SEC applies them to crypto.