SEC Updates Crypto FAQ, Clarifying That Functional Network Token Buybacks Do Not Constitute a Commitment to "Key Managerial Efforts"

Odaily News: The U.S. Securities and Exchange Commission (SEC)'s Division of Corporation Finance has updated its cryptocurrency FAQ, stating that when a network is already functional, announcing token buybacks does not constitute a commitment to "key managerial efforts."

The SEC further stated that maintaining, upgrading, or expanding a functional network, as well as promoting the network's existing functionality or making broad visionary statements that do not involve profits, do not satisfy the relevant conditions of the Howey test.

The SEC noted that if a network is not yet functional, an issuer promoting token buybacks as a source of income or returns for holders may still trigger the application of securities laws. (Decrypt)