SEC Shifts Focus from Buyback Size to Control in Token Guidance

The Securities and Exchange Commission's Division of Corporation Finance has updated its guidance on token buyback announcements. The revised guidance, effective September 28, adds a new condition to determine whether such plans are considered promises of managerial efforts.

An announcement involving a non-security crypto asset would not constitute a promise of managerial efforts if the underlying system is functional and has no central party. This shift in focus moves away from the size of the buyback towards who controls the program and the broader crypto system.

The change highlights the importance of understanding how token buybacks are structured. For instance, some purchases may be automatically executed by code, while others may be subject to discretion by governance bodies or committees.