SEC Clarifies Treatment of Token Buybacks and Staking Receipt Tokens

The US Securities and Exchange Commission (SEC) has issued new guidance on how token buybacks, staking receipt tokens, and ongoing blockchain development are treated under federal securities laws.

The clarification comes in the form of FAQs published by the SEC's Division of Corporation Finance, which build on the Commission's March interpretation. These guidelines do not have the force of law and were not approved or disapproved by the Commission.

One key point concerns token buybacks. According to the SEC staff, announcing a buyback of a non-security crypto asset when the network is already functional does not amount to a promise to perform essential managerial efforts under the Howey test. However, this analysis can differ when the network is not yet functional.