SEC Releases New Guidance on Classifying Cryptocurrency Assets

The U.S. Securities and Exchange Commission (SEC) has released new guidance on classifying cryptocurrency assets as securities or not. The guidance is in the form of nine FAQs, which provide further clarification on issues such as functional networks, staking receipt tokens, token buybacks, and marketing promotions.

According to the FAQ, whether a crypto system has achieved functionality should be judged based on how the issuer defines it, rather than what the market generally considers to be functional. Similarly, decentralization is defined by the issuer's statements or commitments, not by market standards.

The FAQs also address staking receipt tokens, which can be classified as digital commodities if they are intrinsically linked to a programmatically operated mechanism of a functionalized crypto system.