The latest official "9 Questions and 9 Answers" from the SEC clarifies the securities attributes of crypto assets

This article is from: the official website of the U.S. Securities and Exchange Commission

Compiled by: Odaily Planet Daily

Editor's Note: The U.S. Securities and Exchange Commission (SEC) Division of Corporation Finance has released a FAQ on the regulation of crypto assets, focusing on issues such as functional networks, staking receipt tokens, token buybacks, and marketing, providing further reference for understanding under what circumstances crypto assets may not be subject to the investment contract framework.

The following is the original content, compiled by Odaily Planet Daily.

The U.S. Securities and Exchange Commission (SEC) Division of Corporation Finance has released a FAQ regarding the applicability of federal securities laws to certain types of crypto assets and related transactions, further addressing some previously unclear issues in prior interpretive documents on crypto assets. Although this FAQ is not an official rule or statement from the SEC and does not have legal effect, its content further outlines the regulator's understanding of the boundary between "non-securities crypto assets" and "investment contracts."

From functional networks and staking receipt tokens to token buybacks, marketing, and whether trading platforms constitute "promoters," this FAQ covers practical issues that have long been of concern across multiple industries. One important theme is: when a crypto system has achieved functionality and gradually reduces or lacks central control, under what circumstances do the issuer and other participants' ongoing activities to maintain, upgrade, and promote network effects no longer constitute "key management efforts" in the Howey test.

It is important to note that the FAQ does not simply discuss "which tokens are not securities," but further explains the relationship between crypto assets and investment contracts in specific circumstances, as well as which actions may not cause the relevant assets to continue to be subject to the investment contract framework. For the crypto industry, these details may affect the token issuance, marketing, network operations, and buyback arrangements of project parties, and also provide new references for understanding the boundaries of U.S. crypto asset securities regulation.

Questions Regarding the Classification of Crypto Assets

Question 1: The U.S. Securities and Exchange Commission has made relevant definitions for "functional" and "decentralized." However, regarding whether the issuer has fulfilled its statements or commitments to engage in key management efforts, the previous interpretive announcement stated: "…… Whether the issuer has achieved functionality should be judged based on how the issuer defines or otherwise describes functionality, rather than based on what the market generally considers to be functionality"; and "…… Whether the issuer has achieved decentralization should be judged based on how the issuer defines or otherwise describes decentralization, rather than based on what the market generally considers to be decentralization."

So, what is the relationship between the definitions of "functionality" and "decentralization" in the interpretive announcement and the issuer's definitions or descriptions of "functionality" and "decentralization" as part of its statements or commitments in promoting and marketing investment contracts?

These definitions are unrelated to the determination of whether the issuer has fulfilled its statements or commitments, as each issuer will determine the standards that must be met to achieve functionality and/or decentralization.

Question 2: How are staking receipt tokens classified?

If staking receipt tokens are certificates issued for digital goods that are not subject to investment contracts, then the staking receipt tokens themselves belong to digital tools, as they serve as a certificate that proves the holder's ownership of the relevant underlying digital goods.

However, if staking receipt tokens are issued by a protocol-based liquid staking service provider, they may also be classified as digital goods. In this case, the staking receipt tokens have an inherent connection to the programmatic operating mechanism of a functional crypto system, and their value derives from that operating mechanism and supply-demand relationship.

Question 3: Regarding staking receipt tokens and redeemable wrapped tokens, and describing them as "receipts." How do "receipts" differ from other financial instruments?

"Receipts" are tools that prove a specific quantity of assets has been deposited with the custodian or trustee that issued the receipt, while also proving that the depositor has ownership of that asset.

Receipts do not alter any rights, obligations, or interests associated with the deposited assets, nor do they provide the holder with any additional financial incentives or benefits.

The distinction between receipts and other financial instruments lies in that they do not transfer ownership or control of the deposited assets to the issuer of the receipts. Therefore, the issuer may not transfer, lend, pledge, re-pledge, or otherwise use the deposited assets for any reason, nor may the assets be subject to claims from third parties.

Questions Related to Crypto Assets Subject to Investment Contracts

Question 4: The previous interpretive announcement stated: "…… When the relevant statements or commitments clearly and unequivocally involve key management efforts to be undertaken by the issuer, contain sufficient detail to demonstrate the issuer's ability to implement the proposed project, and explain how the issuer's efforts will generate profits that buyers can reasonably expect, these statements or commitments are more likely to form reasonable profit expectations." Under what circumstances would promotional and marketing information constitute statements or commitments to engage in key management efforts?

Whether promotional and marketing information constitutes statements or commitments to engage in key management efforts depends on the specific facts and circumstances.

However, merely promoting the current utility and functionality of the crypto system may not constitute statements or commitments to engage in key management efforts unless there are other factors. Similarly, if the relevant promotional activities do not advertise potential profits and only promote the future potential utility, functionality, and capabilities of the crypto system through uncertain visionary statements, it may also not constitute statements or commitments to engage in key management efforts unless there are other factors.

Question 5: The previous interpretive announcement mentioned certain circumstances: a non-security crypto asset was initially issued and sold under the investment contract framework, but if buyers no longer reasonably expect the issuer to fulfill or continue to engage in its statements or commitments to key management efforts, then that non-security crypto asset will no longer be subject to investment contracts.

If the issuer's statements or commitments are taken over by another party, whether voluntarily or by law, will that non-security crypto asset be separated from the relevant investment contract and no longer be bound by it?

No. If another party takes over the issuer's statements or commitments to engage in key management efforts, whether this assumption is voluntary or occurs by law, the non-security crypto asset will not be separated from the relevant investment contract.

Question 6: Software and networks are typically in a state of continuous development, requiring ongoing maintenance and upgrades. Additionally, a functional crypto system may need to achieve growth through network effects. After a crypto system has achieved functionality, what activities can the issuer and other market participants undertake regarding that crypto system that would not constitute key management efforts?

The U.S. Securities and Exchange Commission has recently stated that once a crypto system has achieved functionality, activities that provide security, maintenance, improvement, or enhancement services for that system or its functions, or promote network effects—whether through initiating or funding development projects or through other similar activities—do not involve key management efforts.

Therefore, any statements or commitments made by the issuer regarding the provision or continued provision (or arrangement for others to provide) such services after the crypto system has achieved functionality will not satisfy the Howey test. (See "Regulation Crypto Assets," Release No. 33-11434 (August 18, 2026), page 56 [91 FR 54510, 54525 (August 21, 2026)]).

Question 7: If a functional crypto system lacks an entity that can centrally control, manage, or materially influence the operation and success of that crypto system, could the relevant statements made by the issuer form a new investment contract, binding the native crypto asset to that investment contract?

If a functional crypto system lacks an entity that can centrally control, manage, or materially influence the operation and success of that crypto system, it is generally unlikely that the issuer would form a new investment contract, as neither the issuer nor anyone else can control that functional crypto system and therefore cannot take any actions that would affect the success or failure of that crypto system.

Question 8: Issuers of non-security crypto assets may conduct buyback plans for various reasons, including fund management, reducing supply, destruction supported by protocol funds, and rebalancing. Does the issuer's announcement of a non-security crypto asset buyback plan equate to a commitment to investors that "I will generate profits for this project/token through my management and operational actions"?

If the crypto system has achieved functionality, the issuer's announcement of a non-security crypto asset buyback plan does not equate to a commitment to investors that "I will generate profits for this project/token through my management and operational actions."

However, if the crypto system has not yet achieved functionality and the issuer describes the buyback as capable of generating profits or returns for token holders, then that buyback announcement may equate to a commitment to investors that "I will generate profits for this project/token through my management and operational actions."

Question 9: The previous interpretive announcement stated that "issuer" includes "affiliates and agents of the issuer or promoter." Therefore, when assessing whether there is an investment contract issuance, will a trading platform providing a secondary market for crypto assets be considered a promoter?

A trading platform providing a secondary market for crypto assets will only be considered a promoter if it meets the definition of "promoter" under Securities Act Rule 405.