US SEC Updates Crypto Guidance, Aligns With CFTC Framework

The U.S. Securities and Exchange Commission (SEC) has updated its guidance on how federal securities laws apply to “certain types of crypto assets and certain transactions involving crypto assets,” expanding on the framework it outlined in March. The new clarification arrived via an update to the agency’s frequently asked questions, and it follows a similar move from the Commodity Futures Trading Commission (CFTC) earlier last week.

In the Friday update to its crypto FAQs, the SEC emphasized that the guidance is non-binding. The agency said the interpretation has “no legal force or effect,” does not amend existing law, and does not create additional obligations for any person. The FAQ material is intended to explain how the SEC would analyze whether certain digital asset products could be considered investment contracts under the Howey test.

Key takeaways

• The SEC’s refreshed crypto FAQ reiterates that it is non-binding and does not change applicable securities laws.
• The SEC’s Howey analysis is framed around whether token-related activities involve “essential managerial efforts,” including in contexts such as buybacks and network functions.
• Token issuer buyback programs may not automatically trigger securities classification if the underlying setup remains decentralized and lacks a central party.
• Network operations and certain staking receipt tokens may not always be treated as securities, depending on how the facts map to Howey.
• The SEC’s update comes shortly after the CFTC provided its own token guidance, while Congress did not advance a proposed crypto market structure bill.