SEC staff issued fresh crypto guidance explaining how staking receipt tokens, wrapped assets, buybacks, and functional networks may fall outside investment contracts under federal securities laws in certain cases.
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SEC Staff Clarifies Staking Receipt Token Treatment
The SEC‘s Division of Corporation Finance issued new crypto FAQs on September 25. The guidance offers an interpretation of the staff’s position on several types of cryptographic tokens as securities under federal securities law.
Staff said some staking receipt tokens may qualify as digital tools rather than securities. Such tokens can serve as receipts proving ownership of an underlying digital commodity.
In some instances, a staking receipt token can also be a digital commodity. Staff said this can apply when a protocol-based liquid staking provider issues the token.
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The guidance does not impose any fresh legal duties or securities law. The SEC itself has neither approved nor rejected the staffs FAQ answers.
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Functional Crypto Networks Receive More Clarity
The FAQs also address when crypto projects may stop involving an investment contract. Staff placed emphasis on the continued need for an issuer to carry out “essential managerial work” for the buyers.
Once a crypto system becomes functional, ongoing maintenance may not meet that standard. Security work, software updates, funding for development and network growth can run without making essential managerial efforts.
Staff also indicated statements concerning a functional decentralized network may not constitute a new investment contract. That view applies where no central party controls the networks success or failure.
The new guidance applies to crypto asset buybacks as well. A buyback with a working network would not necessarily show key managerial activities.
However, different treatment may apply though until a network can be functional. Staff said a buyback could matter when an issuer presents it as creating yield or returns.
Marketing and Crypto Promotions Remain Fact-Specific
The SEC staff also addressed marketing statements made by crypto issuers. However, merely encouraging an existing utility would not, in general, constitute a commitment to management.
General statements about future features may also fall outside that standard. However, the outcome may differ when promotions directly link planned issuer activities to expected investor profits.
The guidance does not deem that all trading platforms are necessarily crypto promoters. Staff said a platform must meet the existing Securities Act definition of “promoter” before that classification applies.
For more, compare rewards, lock-up terms, and regulations across the best crypto staking platforms 2025 today.