SEC Issues Guidance on Cryptocurrency Activities and Securities Law

The SEC has published new FAQs to clarify how federal securities laws apply to certain cryptocurrency activities.

The guidance, issued by the Division of Corporation Finance, addresses token buybacks, network upgrades, staking receipt tokens, and secondary-market trading.

A key point in the guidance is that a token buyback does not automatically make an asset a security. However, if an issuer presents a buyback as a way to generate yield or returns, it can become relevant to the securities analysis.

The SEC also clarified that assessments around whether a crypto system has become functional or decentralized depend on how the issuer described those milestones, rather than relying on generic industry definitions.