SEC Says Token Buybacks and Network Upgrades Don’t Automatically Make Crypto Securities

• The SEC’s Division of Corporation Finance issued nine crypto FAQs on 25 September, building on the interpretive release the SEC and CFTC put out on 17 March.
• A buyback announcement on a functional network is not a promise of managerial effort, but it could be one on a network that is not yet functional if pitched as yield or return.
• Staff said the answers are their own views, and the Commission has neither approved nor disapproved them.

US Securities and Exchange Commission (SEC) staff said on Friday that a token buyback does not, on its own, turn a crypto asset into a security when its network already works.

That answer is one of nine in a set of frequently asked questions the SEC’s Division of Corporation Finance issued on 25 September. The questions build on the March interpretive release in which the SEC and CFTC named Bitcoin, Ether, Solana and XRP as digital commodities.

Staff stated that the answers are their own views, not a rule or a statement of the Commission. The Commission has neither approved nor disapproved them.

Like all staff guidance, these FAQs have no legal force or effect, do not alter or amend applicable law, and do not create any new or additional obligations for any person.