SEC Publishes Detailed Framework for Crypto Securities Law
The U.S. Securities and Exchange Commission (SEC) has released a new guide on how federal securities laws apply to cryptocurrencies.
The guidance, published today, specifically addresses the conditions under which liquid staking tokens, token buybacks, protocol development activities, and marketing activities of crypto projects can constitute 'investment contracts.'
According to SEC Corporate Finance staff, staking receipt tokens, which represent ownership of a digital commodity, can be considered a 'digital instrument' under certain conditions.
The guidance also clarified that token buyback programs are not inherently securities, but can become one if the project team presents them as mechanisms that generate returns or profits for token holders in an already functioning cryptocurrency system.