WASHINGTON — The U.S. Securities and Exchange Commission's Division of Corporation Finance released updated guidance Sept. 25 clarifying that token buybacks, network upgrades and routine marketing statements do not automatically classify an asset as a security under the Howey test.
The updated FAQ document specifies that these actions, by themselves, do not create an investment contract under federal securities law. The guidance also addresses staking receipt tokens and secondary trading platforms.
Critically, the SEC staff stated that promoting a network's current uses generally would not establish an expectation of profit. This distinction focuses on whether marketing claims are likely to influence an asset's classification.
The guidance does not establish new regulations. Instead, it provides interpretive clarity on which specific operational and promotional activities the SEC staff will examine when determining whether an investment-contract relationship exists. The agency will still assess the overall context surrounding an asset and any associated promises made to potential investors.
