SEC Issues Crypto Staff Guidance, Following CFTC’s Lead

The SEC has updated its guidance on how securities laws apply to certain crypto assets and transactions, mirroring a similar move by the CFTC after Congress failed to pass a crypto market structure bill.

SEC Crypto FAQ Update: What It Covers

The Friday update to the SEC’s March FAQs is non-binding, carries no legal force, does not change existing law and creates no new obligations, the agency said. The guidance covers how the SEC applies the Howey test to digital asset products. It says token issuers can run buyback programs for customers when a crypto system is functional and has no central party, without that necessarily counting as a promise of managerial effort, meaning it would not qualify as an investment contract under securities law.

Staking Tokens and Network Functionality

The SEC said a functional system, along with services that secure, maintain or improve it or support network effects, would not necessarily satisfy the Howey test either. Staking receipt tokens would not always be classified as securities.

SEC Follows CFTC After Failed Clarity Act Vote

Both the SEC and CFTC issued their guidance days after the Senate failed to advance the Clarity Act, a bill many expected to define the two agencies’ roles over digital assets. SEC Chair Paul Atkins and CFTC Chair Michael Selig both signaled their agencies would act on crypto regulation without new legislation from Congress.

Hester Peirce’s Departure

Commissioner Hester Peirce, known as “Crypto Mom” for her pro-crypto advocacy, announced Friday she will resign Oct. 2 after eight years at the SEC and plans to join Regent University’s law school in November. Her exit leaves Atkins and Commissioner Mark Uyeda as the SEC’s only two commissioners, with no replacements yet named by President Trump for Peirce or the two vacant Democratic seats.