SEC Issues Crypto Guidance on Staking Tokens and Buybacks

The US Securities and Exchange Commission (SEC) has issued fresh guidance on crypto regulation in the country. The new set of FAQs addresses several long-running questions, including when tokens may fall outside securities regulation.

The SEC's guidance focuses on Staking Receipt Tokens, which represent ownership of crypto assets deposited for staking. According to the agency, a true 'receipt' should not transfer ownership or control of the deposited asset to the issuer, nor allow that issuer to lend, pledge, rehypothecate, or otherwise use it.

The guidance also addresses token buybacks and marketing. The SEC said announcing a buyback of a non-security token for a functional crypto system would not amount to a promise of essential managerial efforts. However, if the network is not yet functional and the issuer markets the buyback as a mechanism designed to generate yield or returns for holders, it could be considered an investment contract.

The SEC's guidance follows the failure of the CLARITY Act in the US Senate on September 15. The agency aims to provide clarity on crypto regulation, which has been a topic of debate in recent months.