Employees of the U.S. Securities and Exchange Commission (SEC) have issued a new guide of questions and answers on how federal securities laws apply to crypto assets. The statement issued today specifically addresses the circumstances under which liquid staking tokens, token buyback programs, protocol development activities, and marketing activities for crypto projects—"investment contracts"—may constitute them.
According to staff from the SEC’s Division of Corporate Finance, staking-receipt tokens, which represent ownership of a digital asset, may be considered a “digital instrument” under certain circumstances. Meanwhile, staking tokens issued by an existing liquid-staking provider based on a protocol can be classified as a “digital asset” if they are tied to the software activity of a functional cryptographic system and derive their value from supply-and-demand dynamics.
The guidance also included a notable assessment of token buyback programs. SEC staff stated that in an already functioning crypto-asset system, announcing a buyback program for a non-security token, by itself, would not be considered “essential administrative efforts” that investors rely on in their expectations of profits.
However, the situation could change if the protocol is not yet functional. According to SEC officials, if the project team offers the buyback program as a mechanism to generate returns or profits for token holders, this could become one of the elements indicating the existence of an investment contract under the Howey test.
SEC also explained that activities such as securing, maintaining, developing, and improving an established crypto system, or providing funds and developing them to enhance the network’s impact, generally do not constitute “essential governance efforts.” As the SEC interpretive framework, published in March 2026, noted, crypto assets may not be securities in and of themselves, but they may become part of an investment contract under certain circumstances of sales and marketing.
In the section on marketing activities, it was noted that merely presenting current use cases and features of the cryptographic system would not be expected to constitute an investment contract. Similarly, describing future features in general, non-binding terms may not be considered an undertaking to make essential administrative efforts unless investors are promised the possibility of profit.
SEC officials also stated that in a crypto system that is not fully functional and lacks a mechanism of centralized control, subsequent announcements made from the source code issuer generally are not expected to create a new investment contract. This is because the issuer or any other party no longer has sufficient control to determine whether the system succeeds or fails.
The guidance also addressed secondary market transactions. It stated that a trading platform that provides a secondary market for a crypto asset would not automatically be considered a “promoter” for that reason alone; rather, the platform must meet the promoter definition under Rule 405 of the Securities Act.
A new SEC announcement provides a more detailed framework for certain long-running areas of debate in the industry, especially regarding how to evaluate liquid staking, token buyback programs, and ongoing development work on decentralized protocols under securities law.
*This is not investment advice.@Binance Square Official