U.S. SEC Staff Issues Guidance on Crypto Tokens and Howey Test Exclusions

U.S. SEC staff has issued new guidance addressing federal securities laws for certain crypto assets. The guidance covers staking receipt tokens, token buybacks, marketing statements, network development, and secondary-market platforms.

The FAQs come from the SEC’s Division of Corporation Finance and build on the Commission’s March 17 interpretive release. Staff stressed that the FAQs are not Commission rules and do not create new legal obligations.

The document focuses on when certain transactions do not meet elements used to identify an investment contract. It also explains when classification can change based on network structure.

SEC staff said some activities on a functional crypto network would not constitute essential managerial efforts. Some of these activities include securing, maintaining, improving, or enhancing the system after it becomes functional.