US SEC issues crypto staff guidance following CFTC move

The SEC updated staff guidance on how federal securities laws could apply to certain crypto assets, following similar guidance from the CFTC the previous week. The SEC said the interpretation was nonbinding, had no legal force or effect, did not alter applicable law, and created no new obligations. The FAQs address how the SEC considers digital asset products under the Howey test for investment contracts. The SEC said token issuers could conduct customer buyback programs if a crypto system was functional and had no central party, because those conditions would not necessarily make the buybacks a promise of essential managerial efforts. The SEC said services to secure, maintain, improve, or enhance a functional crypto network, or to facilitate network effects, would not necessarily satisfy its Howey test. The agency said staking receipt tokens would not always be securities. The updates followed the Senate's failed vote to pass a crypto market structure bill that many had expected to clarify the roles of the two regulators. SEC Chair Paul Atkins and CFTC Chair Michael Selig issued statements signaling that the agencies would address crypto regulation without laws passed by Congress. SEC Commissioner Hester Peirce announced on Friday that she planned to resign on Oct. 2 after serving at the agency for eight years. Peirce is expected to join Regent University's law school in Virginia as an associate professor in November. After Peirce's departure, the agency's leadership will consist of SEC Chair Paul Atkins and Commissioner Mark Uyeda. The bipartisan commission normally has five members. As of Monday, President Donald Trump had not announced potential replacements for Peirce or the two remaining Democratic SEC seats.