Securities and Exchange Commission (SEC) staff issued new FAQs clarifying how the agency’s March interpretation of federal securities laws applies to crypto assets, including functional networks, staking receipt tokens, and representations that could create an investment contract.
The Sept. 25 FAQs address how issuers’ representations and promises should be assessed under the Howey test, including what activities may qualify as essential managerial efforts after a crypto system becomes functional. The guidance also addresses when staking receipt tokens can fall within the SEC’s digital-asset classifications and how promotional communications may factor into an investment-contract analysis.
The responses were issued by the SEC’s Division of Corporation Finance and do not have legal force or effect. The Commission said it has neither approved nor disapproved the content, and the FAQs do not alter applicable law or create new obligations.
Functionality depends on issuer’s representations
One of the FAQs addresses how the SEC’s definitions of a “functional” and “decentralized” crypto system interact with an issuer’s own representations. Staff said the definitions used in the March interpretive release are relevant to the SEC’s classification framework, but do not determine whether an issuer has fulfilled representations or promises made about functionality or decentralization.
For that purpose, the issuer determines the thresholds it has represented as necessary to achieve functionality or decentralization.
The distinction matters because the March interpretation examines whether a non-security crypto asset was offered and sold as part of an investment contract involving promises of essential managerial efforts.
Post-launch network work may not meet Howey test
The FAQs provide additional detail on what happens after a crypto system becomes functional.
Staff said services to secure, maintain, improve or enhance a functional system, as well as efforts to facilitate network effects, generally would not constitute essential managerial efforts under the interpretation cited in the FAQs. That can include sponsoring or funding development projects and similar activities.
As a result, staff said an issuer’s representations or promises to provide those services after the system has become functional would not, on their own, satisfy the essential-managerial-efforts element of the Howey test.
The staff’s response cites the SEC’s August proposal on Regulation Crypto Assets, which includes a proposed conditional safe harbor tied to an issuer completing or permanently ceasing the essential managerial efforts it had represented or promised to undertake.
The qualification remains important: the staff response specifically refers to a functional crypto system and does not establish a blanket exemption for development or maintenance activities.
Marketing claims get a fact-specific test
Another FAQ addresses promotional and marketing communications. Staff said that promoting a crypto system’s existing utility and capabilities would likely not, without more, constitute a representation or promise to undertake essential managerial efforts.
Likewise, statements about potential utility, features, or capabilities that are indefinite and aspirational would generally not constitute such promises when they do not promote the profit potential.
Whether a communication amounts to a representation or promise remains dependent on the facts and circumstances. That distinction is relevant because the March interpretation says explicit and unambiguous representations about essential managerial efforts can contribute to a reasonable expectation of profit under the Howey analysis.
Staking receipt tokens get more detail
The FAQs also clarify the treatment of staking receipt tokens.
Staff said that, under the circumstances described in the March interpretation, a staking receipt token representing a digital commodity that is not itself subject to an investment contract can qualify as a digital tool because it evidences ownership of the underlying asset.
A staking receipt token issued by a protocol-based liquid staking provider may instead qualify as a digital commodity when it is intrinsically linked to the programmatic operation of a functional crypto system and derives its value from that operation and supply-and-demand dynamics.
The March interpretation similarly describes a staking receipt token as an instrument evidencing ownership of deposited digital commodities when it does not give holders additional rights or benefits beyond those associated with the underlying asset.
What counts as a receipt
The staff also distinguishes a receipt from other financial instruments. For purposes of the FAQs, a receipt certifies that a stated amount of an asset has been deposited with a custodian or depository and evidences the depositor’s ownership of that asset.
The receipt does not change the underlying asset’s rights, obligations, or benefits and does not give the holder additional financial incentives. Staff also said the issuer of a receipt cannot transfer, lend, pledge, rehypothecate, or otherwise use the deposited asset, or subject it to third-party claims.
Central control matters after a network is functional
The FAQs address whether statements by an issuer can create a new investment contract once a functional crypto system has no central party. Staff said such statements would likely not create a new investment contract where neither the issuer nor another person controls the functional system in a way that could affect its success or failure.
The response again turns on the underlying facts, including whether anyone retains the ability to exercise the type of control relevant to the Howey analysis.
Buybacks also depend on network status
The staff also addressed token buyback programs. For a functional crypto system, an issuer’s announcement of a buyback program would not constitute a representation or promise to undertake essential managerial efforts, according to the FAQ.
The analysis can differ when a system is not yet functional. Staff said a buyback announcement could constitute such a representation if the issuer presents the program as creating yield or a return for token holders.
Secondary trading platforms not automatically promoters
The FAQs also address the role of trading platforms that provide secondary markets for crypto assets. Staff said a trading platform would be considered a promoter for purposes of the investment-contract analysis only if it meets the definition of “promoter” under Securities Act Rule 405.
The response therefore does not treat every secondary-market platform as an issuer or promoter simply because it facilitates trading in a crypto asset.
FAQs build on March interpretation
The new FAQs follow the SEC’s March 17 interpretive release on crypto assets, which established a classification framework and addressed when a non-security crypto asset may become subject to an investment contract and when that relationship may end.
The SEC later proposed Regulation Crypto Assets in August, including exemptions for certain crypto-asset investment-contract offerings and a conditional safe harbor from the definition of investment contract. The proposal is separate from the new FAQs and remains subject to the rulemaking process.
The Sept. 25 FAQs do not change those rules or create a new safe harbor. They provide the Division of Corporation Finance staff’s interpretation of how the existing framework applies to the questions addressed in the document.
CFTC updates crypto FAQs on tokenized assets
Separately, the U.S. Commodity Futures Trading Commission (CFTC) updated its crypto-related FAQs on September 24, 2026, providing regulated firms with additional guidance on tokenized assets and blockchain-based recordkeeping.
The update addresses two areas gaining relevance as financial firms use blockchain infrastructure. One covers customer funds invested in tokenized forms of permitted investments, while the other addresses the use of blockchain technology to maintain records required under CFTC rules.
Tokenization generally involves representing an asset or related ownership rights through a digital token recorded on a blockchain. The CFTC’s updated FAQs explain how such arrangements can fit within activities already subject to its regulatory framework.
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