Petro D. | ResearchCommunity

@PDmytriiev

The SEC staff's new FAQ mostly tells token teams how to get out of securities status, and how to stay out. SEC published it on Sept. 25. It has nine Q&As that fill gaps in the March 17 interpretation, which the CFTC also joined. The FAQ is staff guidance with no legal force: https://t.co/E4JTLsPWMO Functionality and decentralization → The SEC's own definitions of "functional" and "decentralized" decide how a token is classified. → Whether an issuer kept its promises is judged only against the milestones it set for itself. That makes whitepaper and roadmap wording legally important. Staking receipts and wrapped tokens → A liquid staking token backed by a non-security asset is either a digital tool or, if a protocol-based provider issues it, a digital commodity. Either way it is not a security. → The receipt test is strict. The issuer can't lend, pledge or rehypothecate the deposit, and can't add incentives on top. Products that do any of that lose the safe harbor. Marketing and promises → Promoting what a product does today, or aspirational features with no profit talk, generally isn't a promise of managerial effort. → Handing the roadmap to a foundation, DAO or estate doesn't end the investment contract. Life after launch → Once a network is functional, upgrades, maintenance, grants and ecosystem funding are not managerial efforts. → If there is no central party, the issuer's later statements can't create a new investment contract. Buybacks → For a functional network, a buyback announcement is fine. That is a green light for fee-switch models and Hyperliquid's Assistance Fund. → Before a network is functional, presenting a buyback as yield for holders can count as a promise. Exchanges → A secondary-market venue isn't a promoter unless it meets the Rule 405 definition. Launchpads and exchanges that actively promote a token could still meet it. Net effect → Regulatory risk now depends on what issuers say and when they say it, not on token design. "Functional" is still loosely defined, and all of this depends on the current Commission.

Sunday, September 27, 2026 at 11:06 AM UTC