SEC Refines Guidance on XRP's Commodity Status

The Securities and Exchange Commission (SEC) has updated its crypto asset FAQ to provide clarity on XRP's classification as a digital commodity. The update, published September 28, builds on previous guidance from March and September of this year.

The SEC's Division of Corporation Finance clarifies that functionality, utility, and decentralization are central to how the agency assesses crypto assets. For functional networks like XRP, activities related to securing or improving the network no longer constitute essential managerial efforts under the Howey test.

This change narrows the path to securities classification for functional networks. The SEC also addresses promotional activity, stating that promoting a crypto system's current utility does not automatically constitute a representation or promise of essential managerial efforts.