SEC Follows CFTC in Staff Guidance for Crypto
The US Securities and Exchange Commission (SEC) has updated its policies on how securities laws apply to certain types of crypto assets. This move follows a similar update by the Commodity Futures Trading Commission (CFTC) last week.
The SEC's FAQs, issued in March, have been revised to include guidance on digital asset products falling under the Howey test for investment contracts. The agency clarified that token issuers can conduct buyback programs without qualifying as an investment contract, provided the crypto system is functional and has no central party.
The regulator also issued similar guidance for crypto networks, stating that a system that is functional and provides services to secure or maintain its functionality would not necessarily satisfy the Howey test. Staking receipt tokens were also found not to always classify as securities.
The SEC's updates follow the Senate's failure to pass a crypto market structure bill, which many had expected to clarify the roles of the two financial regulators in digital assets. The agencies have signaled that they will address crypto regulation in the absence of laws passed by Congress.