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4 clusters · 23 sources · 12 days · First seen · Last updated

US SEC cryptocurrency regulatory guidance

Overview

The U.S. Securities and Exchange Commission (SEC) has issued new guidance through its Division of Corporation Finance to clarify the regulatory status of various cryptocurrency activities under the Howey test. Initial guidance addressed token buybacks and network maintenance. The SEC indicated that for functional networks, activities such as software upgrades, development grants, and token buybacks generally do not constitute the managerial efforts required to classify a token as a security. However, if a buyback is marketed to generate yield on a non-functional network, it may still be viewed as an investment contract. Additionally, the SEC introduced an Innovation Exemption for the conditional trading of tokenized stocks in permissioned environments. Subsequent clarification focused specifically on liquid staking tokens. The SEC determined that staking receipt tokens are not considered securities if they function strictly as receipts for an underlying digital commodity, such as Ethereum. To maintain this status as a ‘digital tool’, these tokens must not alter the rights of the locked asset, offer additional rewards, or involve the provider lending or reusing the deposited coins. In an updated FAQ released on September 28, SEC staff introduced a new requirement for token buybacks of non-security crypto assets. To avoid being classified as a promise of essential managerial efforts, the crypto system must be both functional and have ‘no central party.’ Regarding staking-receipt tokens, the guidance maintains that a receipt may qualify as a digital tool if it represents ownership of an underlying digital commodity that is not an investment contract. On October 6, the SEC released further updated FAQs addressing airdrops, protocol mining, protocol staking, wrapped assets, and staking receipt tokens. The agency emphasized that these FAQs reflect only the views of agency staff and carry ‘no legal force or effect,’ meaning the Commission has neither approved nor disapproved the contents.

Entities

Securities and Exchange Commission · Division of Corporation Finance · CLARITY Act · SEC · Commodity Futures Trading Commission

Timeline

  1. [BUSINESS] 2 sources
    SEC issues non-binding crypto guidance via updated FAQ

    The SEC's Division of Corporation Finance issued updated crypto FAQs, providing staff interpretations on assets and transactions while clarifying the guidance has no formal legal force or effect.

  2. [BUSINESS] 2 sources
    SEC updates crypto guidance on token buybacks and staking

    The SEC staff updated crypto guidance, stating token buybacks for non-security assets require a functional system with ‘no central party’ to avoid being classified as investment contracts.

  3. [BUSINESS] 2 sources
    SEC clarifies that Ethereum liquid staking tokens are not securities

    The SEC issued guidance stating that liquid staking tokens backed by Ethereum are not securities if they function as mere receipts, providing regulatory clarity for providers like Lido.

  4. [TECHNOLOGY] 21 sources
    SEC issues new guidance on crypto token buybacks and staking

    SEC staff issued new guidance clarifying that token buybacks on functional networks and routine maintenance do not necessarily constitute securities, while providing clarity on staking receipt tokens.

Sources

ambcrypto.com · bitnewsbot.com · coindeskjapan.com · coindoo.com · coingape.com · coinpedia.org · cointribune.com · crypto.news · cryptobreaking.com · cryptobriefing.com · cryptonewsland.com · cryptonomist.ch · cryptoslate.com · decrypt.co · haiti24.net · koinbulteni.com · merca2.es · newsbit.nl · pymnts.com · theascent.com · thefinancialanalyst.net · tokenpost.com · unchainedcrypto.com

This summary has been updated 2 times: see revision history