The SEC released guidance on September 25 addressing crypto token buybacks, clarifying when such programs trigger securities laws. The agency stated that buyback announcements for functional, decentralized crypto systems do not constitute representations requiring essential managerial efforts and therefore do not violate securities law.
For centralized or non-functional systems, however, buybacks are viewed as promises to create yield for token holders, classifying them as investment contracts that require SEC registration.
The guidance received mixed reactions across the industry. Uniswap CEO Hayden Adams praised the clarification, which comes after the company began UNI token buybacks last year following earlier regulatory caution under the Biden-era SEC. Arca CIO Jeff Dorman suggested the guideline could improve an industry characterized by inflationary projects.
However, a16z's General Counsel Miles Jennings flagged what he described as a significant loophole. Jennings warned that the guidance could allow startups to tokenize revenue streams and sell them publicly while avoiding securities regulations. SEC Commissioner Hester Peirce disputed this interpretation, noting the FAQ applies only when no central party exists.
Jennings maintained his criticism, arguing the language could enable regulatory circumvention. Several prominent crypto lawyers, including VB Capital's Scott Johnsson and Gabriel Shapiro, echoed similar concerns about potential adverse consequences.
Crypto token buybacks reached $638 million in 2026, with Hyperliquid dominating the category. It remains unclear whether the SEC will revise the guidance in response to industry feedback.
