SEC staff clarifies securities rules for token buybacks and staking receipts

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1. TW

   The Wolf Of All Streets@scottmelkerPost on X · Sep 25

   JUST IN: SEC STAFF ISSUES NEW CRYPTO GUIDANCE CLARIFYING WHEN CERTAIN TOKENS, STAKING RECEIPT TOKENS AND CRYPTO BUYBACKS MAY FALL OUTSIDE SECURITIES LAWS GUIDANCE REPRESENTS SEC STAFF VIEWS, IT IS NOT A NEW SEC RULE OR LAW

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2. CR

   CryptoSlateArticle · Sep 27

   SEC staff’s staking-token split spotlights the exit risks behind staked ETH tokens An ETH holder can sell a liquid-staking token while the ETH behind it remains staked. A Sept. 25 SEC staff FAQ draws a conditional distinction between receipts that evidence ownership and protocol-issued tokens. Coinbase and Lido disclosures show the holder's practical stake: a transferable token does not guarantee immediate unstaked ETH or a sale at the underlying position's value. The Securities and Exchange Commission's Division of Corporation Finance said a qualifying staking receipt for a digital commodity may be a “digital tool.” A token issued by a protocol-based liquid-staking provider may instead be a “digital commodity.” The staff does not classify Coinbase's cbETH or Lido's stETH by name. Their terms determine who holds the deposited ETH, how the token can be redeemed and what can happen if its holder sells instead. What counts as a receipt The staff FAQ defines a receipt by the rights it represents. It evidences that an asset was deposited and that the depositor retains ownership. Under the FAQ's description, ownership and control do not pass to the receipt issuer, which cannot transfer, lend, pledge, rehypothecate or otherwise use the deposited asset, or expose it to third-party claims. That is a description of the type of receipt the staff is discussing, not a new custody rule for every token sold as liquid staking. The FAQ then distinguishes two possible classifications under the SEC's March crypto-asset interpretation . A receipt for a digital commodity that is not subject to an investment contract can be a digital tool because its function is to evidence ownership. A receipt issued by a protocol-based liquid-staking provider may itself be a digital commodity when its value is linked to a functioning crypto system and market supply and demand. The word “may” matters: neither answer assigns a status to an individual product merely because it is called a staking token. An earlier August 2025 staff statement described liquid-staking tokens as transferable evidence of deposited assets and their accrued rewards. It discussed both smart-contract protocols and third-party custodians, limiting its securities-law view to the arrangements it described. It did not address restaking or arrangements in which a provider controls staking choices, sets or guarantees rewards, or facilitates additional token returns. Falling outside that statement is not, by itself, a finding that an arrangement involves securities. Related Reading SEC clarifies liquid staking tokens are receipts, not securities Those categories shape the staff's securities-law analysis of the arrangements it describes; they do not certify access to the ETH underneath. Coinbase and Lido provide a practical comparison of different custody and redemption routes. The FAQ makes no determination about either product. Two routes back to ETH Coinbase's custodial path Coinbase's US user agreement says cbETH represents ETH staked through Coinbase, including associated rewards and subtracting fees or slashing penalties. It says the staked ETH and rewards wrapped as cbETH are held by Coinbase on behalf of token holders and that ownership does not transfer to Coinbase. Selling or transferring cbETH transfers the underlying ownership interest and the contractual redemption right to the recipient. That transferability gives a holder a way to seek an exit before the staked ETH is withdrawn. Coinbase's product guidance says cbETH can be sold, sent or held in an external wallet. But selling it is a market transaction, and Coinbase warns in its agreement that the token's price can diverge from ETH or staked ETH. Coinbase does not promise that a buyer will be available or backstop cbETH liquidity. The contractual redemption route is different from a sale. The agreement says an eligible cbETH holder must have a Coinbase account in good standing and meet staking eligibility requirements to unwrap; geographic limits and processing delays may apply. Unwrapping returns staked ETH, with rewards less applicable fees and slashing, not immediately spendable unstaked ETH. Obtaining ETH after that requires a further unstaking request and completion of Ethereum's process. A transferable token therefore does not give every holder the same immediate redemption route. Related Reading Fidelity grants ETFs power to stake 100% of crypto while outlining exit delay risks Lido's protocol path Lido's contract documentation describes a different operating model. A user deposits ETH into the protocol's smart contract and receives stETH. To reclaim ETH through the protocol, a holder submits a withdrawal request that enters a queue. The token can also be sold to another trader instead of waiting for that process. Those routes expose the holder to different constraints. Lido's risk disclosure says a protocol withdrawal can be slowed by queue capacity and Ethereum validator exits. The ETH ultimately received follows the protocol's accounting and can be affected by adverse events such as slashing. A secondary-market sale is faster only if someone will trade at an acceptable price; spreads, slippage and a discount to ETH can widen when liquidity is strained. The disclosure also identifies smart-contract, governance and validator risks, and says stETH and wstETH have no general, protocol-level regulatory approval. Related Reading Ethereum’s institutional staking boom is growing, but Lido’s share is shrinking A label does not settle the exit The two products illustrate why “liquid” describes a token's ability to move, not a guaranteed conversion into unstaked ETH at a fixed value. With cbETH, the holder depends on Coinbase's custody terms and eligibility process for contractual unwrapping, or on a market buyer for a sale. With stETH, the holder can use a protocol withdrawal queue or a market buyer. In either case, the secondary-market price can differ from the value of the underlying staked position. The Sept. 25 FAQ does not classify either token by name, and its answers are nonbinding staff views that create no new obligations. Its useful distinction is narrower: before treating a liquid-staking token as interchangeable with ETH, a holder needs to know who retains ownership of the deposit, who operates the redemption path, what asset comes back first and which delays or losses can intervene. A regulatory category alone cannot answer those product-level questions. The post SEC staff’s staking-token split spotlights the exit risks behind staked ETH tokens appeared first on CryptoSlate .

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3. WS

   Wall St Engine@wallstenginePost on X · Sep 25

   SEC STAFF ISSUES CRYPTO SECURITIES FAQS SEC staff issued new guidance outlining when certain crypto activities may fall outside securities laws. Under the guidance, staking receipt tokens can qualify as digital tools or commodities rather than securities, while token buybacks on functional networks do not by themselves count as the managerial efforts used in the Howey test. The staff also says ongoing maintenance, upgrades and efforts to grow network usage generally are not “essential managerial efforts” once a crypto system is functional, and marketing a token’s utility without promoting profit potential generally would not create an investment contract.

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4. UN

   UnchainedArticle · Sep 26

   SEC Staff Clear Token Buybacks on Working Networks, With a Warning for Unfinished Ones More crypto projects are using revenue to buy back their own tokens, the way public companies repurchase stock. Ethena proposed a buyback program in late August. What those teams lacked was a clear answer on whether announcing one could make their token look like a security. The SEC’s Division of Corporation Finance gave one on Friday. Where a crypto system is functional, the staff wrote in the FAQs, “an issuer’s announcement of a non-security crypto asset buyback program would not constitute a representation or promise to undertake essential managerial efforts.” That kind of promise is what can turn a token sale into an investment contract under the Howey test. The answer has a limit. On a network that isn’t yet functional, the staff warned, the same announcement could cross the line “if the issuer presents the buyback as creating yield or return for token holders.” Staking Tokens and Upgrades The FAQs build on the interpretation the SEC issued on March 17, which the CFTC joined and which sorted crypto assets into categories including digital commodities and digital tools . SEC Chair Paul Atkins said at the time that it acknowledged “most crypto assets are not themselves securities.” Staking receipt tokens , which users get for depositing assets with a liquid staking provider, are digital tools when they are receipts for a digital commodity that is not itself subject to an investment contract, the staff said. They may count as digital commodities themselves if the token comes from a protocol-based liquid staking provider. Once a network is functional, work to secure, maintain or improve it, including funding development projects, is not the managerial effort that makes a token a security, the staff added. The SEC floated that view in its proposed Regulation Crypto Assets in August. Where the Line Holds Not every answer loosens the rules. If another party takes over an issuer’s promises, the token stays subject to the original investment contract. A trading platform that lists a token counts as its promoter only if it fits Rule 405’s definition of a promoter under the Securities Act. The FAQs are staff views, not a Commission rule, and “have no legal force or effect,” the division said in the document. Related Listen: Why the Crypto Market Cap Could Reach $50 Trillion This Cycle The post SEC Staff Clear Token Buybacks on Working Networks, With a Warning for Unfinished Ones appeared first on Unchained .

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5. CR

   CryptoSlateArticle · Sep 26

   SEC clears regulatory hurdle as crypto token buybacks hit record $638 million Crypto projects spent about $638 million with token buybacks through late August 2026, according to Allium Labs data. That is already a record, up from $545 million over the same stretch of 2025. Hyperliquid accounted for roughly $370 million and Pump.fun for about $200 million, together close to 90% of the total. On Sept. 25, staff at the Securities and Exchange Commission (SEC) addressed the legal tension that has shadowed those programs since they began. The more openly a project ties its token to business returns, the easier it becomes to argue that holders are investing in a security. What SEC staff said The SEC's Division of Corporation Finance addressed buybacks in a new set of crypto FAQs covering networks that are already functional. Staff said an issuer's buyback announcement for a non-security crypto asset on such a network falls outside the promises of “essential managerial efforts” at the center of the Howey test for investment contracts. The same answer warns younger projects that on a network yet to reach functionality, pitching a buyback as a source of yield or returns can feed into an investment-contract analysis. The answer rests on two built-in assumptions, a functional system and a token that already sits outside securities law, and it carries the weight of staff views, which the SEC describes as lacking legal force. Under the agency's March interpretation, a network counts as functional when its native token can be used according to its programmed utility. A regulatory life cycle takes shape The SEC's March interpretation says a token can be sold as part of an investment contract while a team raises money against promises of managerial work. That contract can end once buyers stop expecting profits from those promised efforts. The pending Regulation Crypto Assets proposal would let projects raise up to $5 million over four years under a startup exemption. A larger fundraising exemption would allow up to $75 million every 12 months, with disclosure requirements attached to both. Proposed Rule 400 adds a transition filing, the Form TR, in which an issuer certifies on EDGAR that it has completed or permanently ceased its promised managerial efforts and stopped making new ones. The issuer files it directly, and the agency could later contest whether the conditions were met. In its paperwork estimates, the SEC assumes about 475 issuers a year could rely on that safe harbor, based on 15% of the roughly 3,165 projects launched in 2024. Comments on the proposal close Oct. 20. Put together, the pieces sketch a path from securities-regulated fundraising to a mature network that can spend real revenue on its own token. The Form TR covers projects that abandoned their roadmaps as well as those that finished them, while the buyback FAQ applies only once a network is functional. That structure rewards teams that define their build as a finite list of milestones they can eventually complete, and it discourages marketing that frames buybacks as returns before the product works. Stage Regulatory position What the project can do Key constraint Raise Token sold as part of an investment contract Raise capital against promised managerial work Securities-law obligations attach to the fundraising arrangement Build Promised essential managerial efforts continue Develop network and deliver disclosed milestones Marketing returns or buybacks can contribute to Howey analysis Transition Promised efforts completed or permanently ceased Proposed Form TR documents the transition SEC can later challenge whether conditions were actually satisfied Functional network Token can perform its programmed utility Operate without the original investment contract necessarily continuing Token's status still depends on facts and circumstances Mature buybacks SEC FAQ assumes a functional network and non-security token Announce revenue-funded token repurchases Buyback announcement alone is not an essential-managerial-efforts promise The money already flowing to token buybacks Pump.fun says half its revenue goes to buying and permanently burning PUMP . Its dashboard shows roughly $500 million in annualized revenue , about $462.5 million in cumulative purchases, and 167.7 billion tokens destroyed, equal to 16.8% of the original supply. At the current run rate and allocation, that implies around $250 million in annual purchases, about 6.4% of Pump.fun's displayed $3.91 billion fully diluted valuation. The figure measures purchasing power against valuation, with the cash going into open-market token purchases. Hyperliquid has bought and burned roughly $1.3 billion of HYPE since launch, and its documentation says more than $1 billion in annualized fees now flows into programmatic HYPE purchases. Uniswap switched on protocol fees on Ethereum mainnet in December 2025 and has since extended them to other chains, with outside searchers collecting accumulated fees only by burning UNI in exchange. Hyperliquid funds staking rewards from a reserve of future emissions even as trading fees burn HYPE. A protocol that burns 5% of supply while issuing 8% through emissions and unlocks ends up diluting holders despite a large headline buyback . A more useful measure for these tokens is net burns against new issuance before comparing the result to valuation. Aave's program shows how quickly treasury needs can override a buyback. It acquired more than 205,000 AAVE , about 1.28% of supply, for roughly $42 million in its first ten months. Related Reading One number now decides if crypto companies spending $880M+ buying back their own tokens will work Governance then debated cutting the annual budget from $50 million to $30 million as revenue softened. The DAO paused purchases on April 19, after the rsETH bridge incident, to preserve balance-sheet flexibility. Crypto's record remains small next to Wall Street, where S&P 500 companies spent $1.02 trillion on repurchases in the 12 months through September 2025. The growth pace sets crypto apart, rising from about $366,000 in 2024 to $638 million in under eight months of 2026, with mechanisms that automatically convert revenue into market purchases. Protocol Buyback / burn mechanism Scale cited in article What can offset or interrupt it Pump.fun 50% of revenue allocated to open-market PUMP purchases and permanent burns ~$500M annualized revenue; ~$462.5M cumulative purchases; 167.7B PUMP destroyed Revenue declines; future token issuance/unlocks Hyperliquid Trading fees fund programmatic HYPE purchases and burns ~$1.3B bought and burned since launch; >$1B annualized fees flowing toward purchases Staking rewards and future emissions can offset supply reduction Uniswap Protocol fees accumulate; searchers obtain assets by burning UNI Fee mechanism active since Dec. 2025 and expanded across chains Governance controls fee deployment and future mechanism Aave Treasury-funded open-market AAVE purchases >205,000 AAVE / ~$42M in first ten months Treasury needs; program paused after rsETH incident What token holders own The rights attached to these tokens remain thin. Uniswap's documentation says value reaches UNI holders through the burn mechanism and whatever future mechanisms governance approves, with protocol revenue staying under the protocol's control. The SEC's March interpretation describes digital commodities as assets whose holders lack any inherent right to passive yield, future income, or profits. A buyback can reduce supply and create steady demand, and governance can redirect or pause it at any point. The same distance from securities law that makes a mature token easier to trade also keeps it apart from the cash flows investors use to value it. Bitcoin, which the SEC lists as a digital commodity, runs without an issuer or protocol revenue to recycle, so revenue multiples and buyback ratios apply to tokens like HYPE, PUMP and UNI. Where the token buyback model goes from here If the SEC finalizes Regulation Crypto Assets close to its current form, teams can raise money under the exemptions, write finite roadmaps, file transition reports, and steer revenue into token purchases once their networks work. Hyperliquid's fee flows and Pump.fun's allocation alone point to industry buybacks above $1 billion a year at current run rates. Revenue and dilution-adjusted buyback yield would become standard tools for valuing protocol tokens. Feature Public-company shareholder Mature protocol token holder Ownership claim Equity ownership in corporation Generally no ownership of protocol/company merely from holding token Right to profits May receive distributions if declared; residual corporate rights defined by securities/corporate law No inherent right to future protocol income or profits Buyback effect Company purchases outstanding shares Protocol/DAO purchases or burns tokens, potentially reducing supply or adding market demand Guaranteed buybacks? No No Who can change the program? Board/company subject to corporate and securities-law constraints Governance, protocol rules or other authorized actors depending on design New issuance can offset purchases? Yes, through new share issuance/compensation Yes — emissions, incentives and unlocks can overwhelm burns Claim on underlying revenue Share represents equity rights in the company Buyback-linked token may have no contractual claim on the revenue funding purchases Useful valuation metric Earnings, free cash flow, buyback yield, dilution Protocol revenue, gross buybacks and net issuance/dilution If the proposal stalls or emerges in weaker form, the nonbinding staff FAQ becomes the main source of comfort, and projects would keep return language out of their marketing while treating buybacks as discretionary. Revenue-linked programs shrink mechanically when revenue falls, and a major exploit or bad-debt event could push other treasuries to conserve funds the way Aave did. Holders would then find that a buyback resembles a shareholder return in its market effect while remaining revocable, governance-dependent, and free of any contractual claim. The SEC is building a route for crypto networks to spend their revenue on their tokens. Holders at the end of that route own an asset tied to a business's success through scarcity and demand, while the business's revenue stays with the protocol. The post SEC clears regulatory hurdle as crypto token buybacks hit record $638 million appeared first on CryptoSlate .

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6. CO

   CoinGape@CoinGapeMediaPost on X · Sep 26

   🔥 LATEST: SEC staff say that maintaining, securing, and upgrading a functional crypto network generally does not qualify as “essential managerial efforts” under the Howey test. https://t.co/nQwnLx1T7f

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7. CR

   Crypto Rover@cryptoroverPost on X · Sep 28

   BREAKING: 🇺🇸 SEC updates crypto token buyback guidance just days after releasing it. Buybacks are now covered only for working networks with no central party behind them. CLARITY is coming! https://t.co/nXi2HgmLv8

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8. SO

   SolanaFloor@SolanaFloorPost on X · Sep 25

   🚨NEW: SEC staff has issued fresh crypto guidance clarifying how token buybacks, continued development, marketing, and liquid staking tokens are treated under securities laws. • Development: Once a network is functional, teams can continue building, upgrading, and funding development without those activities being considered “essential managerial efforts” that could keep a token tied to an investment contract. • Token buybacks: Buybacks of a non security token on a functional network do not, by themselves, constitute “essential managerial efforts.” For unfinished networks, the answer can change if buybacks are promoted as creating “yield or return” for holders. • Liquid staking: Staking receipt tokens representing non security crypto can be treated as a “digital tool,” while protocol issued LSTs can also qualify as “digital commodities.” • Marketing: Teams can promote a network’s existing utility and discuss future features without automatically creating a securities issue. The key distinction is whether the promotion creates expectations of profits based on the team’s work. • Decentralized networks: Once a functional network has “no central party” controlling its success or failure, statements from the original issuer are unlikely to create a new investment contract around the native token. • Exchange listings: A trading platform is not automatically considered a token promoter simply because it provides a secondary market for the asset.

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9. LS

   Laura Shin@laurashinPost on X · Sep 26

   SEC staff say a crypto project announcing a token buyback is not, on its own, promising the kind of managerial effort that makes a token a security, as long as the network already works. Buybacks pitched as yield on an unfinished network could still cross the line. https://t.co/XBOLjnNOfQ

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10. CB

    Crypto Briefing@Crypto_BriefingPost on X · Sep 28

    ⚖️NEW: SEC staff updates its crypto FAQ on token buybacks, clarifying that when a functional crypto network has no central party, buyback-related statements are unlikely to create an investment contract. https://t.co/LqfASA5BLq

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