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first_img SEC Updates Token Classification FAQ: Adapting to DUNA Entities, Clarifying Issues of Functionality and Decentralization Boundaries, etc

a16z Chief Legal Counsel Miles Jennings posted on X that the U.S. Securities and Exchange Commission (SEC) has released new FAQs that further clarify its token classification framework. He pointed out that Question 1.4 clearly states that systems can maintain decentralized governance and use legal entities such as DUNA; Question 1.5 distinguishes between licensed and unlicensed systems; and Question 1.6 clarifies the difference between "functional" and "decentralized."The SEC's Division of Corporation Finance updated the relevant Q&A on November 2. The response to Question 1.4 states that participants in a widely governed functional crypto system, if not interconnected and without formal or informal collaborative arrangements other than participating in that governance system, typically do not constitute a group of persons or entities defined as "centralized parties"; even if they do form such a group, they must still possess operational, economic, or voting control to meet the definition of "centralized parties." This conclusion also applies to cases where the governance system belongs to an organization, association, or foundation, and participation is based on holding native crypto assets.The response to Question 1.5 states that centralized party oversight of participants refers to the authority to control access to the system at the protocol, validator, or user level, such as unilaterally granting or restricting access, deciding on upgrade voting procedures, controlling who can participate in consensus, or modifying rule code, revoking transactions, and access. The response to Question 1.6 states that "functional" refers to native crypto assets being usable according to the system's programmed purposes, while "decentralized" refers to the system operating autonomously without any person, entity, or group having operational, economic, or voting control; the two are distinct concepts. The above responses represent the views of the staff of the Division of Corporation Finance and do not constitute SEC rules or statements.

hot_img Binance: Security incident possibly involving an engineer's laptop being hacked, affecting approximately 6.3 billion USD

Binance released preliminary investigation results on its official X account, stating that the security incident may involve the laptop of a DevOps engineer being compromised. The attacker used this to access the service container and submitted unauthorized withdrawal transactions. Binance stated that there is currently no evidence of wallet private key leakage and will publish a detailed technical review after the investigation is complete and the facts are fully verified.Binance estimated the total impact of the incident to be approximately $6.3 billion. The platform has frozen related assets in collaboration with blockchain partners, with about $3 billion currently frozen on-chain. Binance stated that it will cover all losses through the SAFU fund and company funds, ensuring user fund safety, and will release updated proof of reserves after the resolution is complete.As an immediate measure, Binance has suspended deposits and withdrawals until security checks are completed, revoked the authorization of affected addresses, and has contacted law enforcement and blockchain intelligence partners to track and recover funds. Binance stated that the team is working with law enforcement partners to confirm the identities of the relevant individuals and reminds users to obtain updates only through official channels.
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