SEC Clarifies Crypto Buyback and Staking Token Guidelines

The Securities and Exchange Commission (SEC) has clarified guidelines for crypto buybacks and staking tokens, focusing on whether a system is functional and lacks a central party.

In an updated FAQ issued September 25 and revised on September 28, the SEC's Division of Corporation Finance addressed concerns surrounding token buybacks, staking receipts, and post-launch network development.

The guidelines state that for a functional system with no central party, announcing a buyback of a non-security crypto asset would not represent or promise essential managerial efforts.

If the system is not functional, however, a buyback promoted as creating yield or returns for token holders could be subject to investment-contract analysis.