SEC Clears Token Buybacks for Functional Crypto Networks

The US Securities and Exchange Commission (SEC) has provided clarity on token buybacks for functional cryptocurrency networks, stating that they do not trigger securities laws.

This guidance is a significant shift in tone and substance from previous administrations' tougher stance on crypto.

According to the SEC's updated FAQ, a token buyback on a functioning network does not constitute a promise of managerial effort under the Howey test.

The staff guidance also clarifies that maintaining, upgrading, or promoting a functional network is not considered an offer of securities.