The U.S. Securities and Exchange Commission has released new guidance explaining when crypto assets and related activities fall under federal securities laws. The Division of Corporation Finance issued the guidance on September 25, building on its March 2026 Interpretive Release.
When Crypto Assets Become Investment Contracts
According to the SEC, a crypto asset may be treated as part of an investment contract when buyers invest money with the expectation of profits from the essential managerial efforts of others. This determination is based on the Howey test, which courts use to assess whether an arrangement qualifies as an investment contract.
Simply promoting a crypto network's current uses or future features generally would not be sufficient to create an investment contract, particularly when statements do not mention potential profits. However, when an issuer makes clear promises about future work and links those efforts to potential profits for buyers, such statements could create a reasonable expectation of profit and trigger securities law treatment.
Functional Networks and Buybacks
The guidance addresses activities after a crypto system becomes functional. Once a network is operational, activities such as securing, maintaining, or improving it would generally not count as essential managerial efforts required under the Howey test.
For decentralized networks without a central controlling party, statements from the original issuer would generally not create a new investment contract because the issuer no longer controls whether the network succeeds or fails.
Regarding crypto buybacks, the SEC clarified that announcing a buyback of a non-security crypto asset on a functional network generally would not create an investment contract. However, if the network is not yet functional and the issuer promotes the buyback as a way to generate returns for token holders, the situation changes and securities treatment may apply.
Staking Tokens and Receipt Clarification
The guidance provides clarity on staking receipt tokens. According to the SEC, a staking receipt token can be treated as a digital tool when it represents ownership of an underlying digital commodity that is not subject to an investment contract.
In some cases, a staking receipt token issued by a protocol-based liquid staking provider may instead qualify as a digital commodity. The SEC emphasized that a receipt is distinct from other financial instruments because it simply proves ownership of an underlying asset. The receipt issuer cannot transfer, lend, pledge, or otherwise use the deposited asset.
