The U.S. Securities and Exchange Commission (SEC) staff has released a new Q&A guide on how federal securities laws apply to crypto assets. The statement, published today, specifically addresses the conditions under which liquid staking tokens, token buybacks, protocol development activities, and marketing activities of crypto projects can constitute “investment contracts.”
According to SEC Corporate Finance staff, staking receipt tokens, which represent ownership of a digital commodity, can be considered a “digital instrument” under certain conditions. Staking tokens issued by a protocol-based liquid staking provider, however, can be classified as a “digital commodity” if they are tied to the programmatic activity of a functional cryptographic system and derive their value from supply and demand dynamics.
The guidance also included a notable assessment of token buyback programs. SEC staff stated that in an already functioning cryptocurrency system, the announcement of a buyback program for a non-security token would not, in itself, be considered “essential managerial efforts” upon which investors base their profit expectations.
However, the situation can change if the protocol is not yet functional. According to SEC officials, if the project team presents the buyback program as a mechanism that generates returns or profits for token holders, this could become one of the elements indicating an investment contract under the Howey test.
The SEC also clarified that activities such as securing, maintaining, developing, and improving an established crypto system, or granting and developing funds to enhance network impact, do not generally constitute “essential governance efforts.” The SEC’s interpretive framework, published in March 2026, also indicated that crypto assets may not be securities in themselves, but could become part of an investment contract under certain sales and marketing conditions.
In the section on marketing activities, it was stated that simply introducing the current use cases and features of a cryptographic system is not expected to constitute an investment contract. Similarly, describing future features in general and non-binding terms may not be considered a commitment to fundamental management efforts unless investors are promised profit potential.
SEC officials also stated that in a crypto system that is not fully functional and lacks a centralized control mechanism, it is generally not expected that subsequent announcements by the token issuer would create a new investment contract. This is because the issuer or any other party no longer has enough control to determine the success or failure of the system.
The guidelines also addressed secondary market transactions. It stated that a trading platform providing a secondary market for a crypto asset would not automatically be considered a “promoter” simply for that reason; the platform must meet the definition of a promoter under Rule 405 of the Securities Act.
The SEC’s new announcement provides a more detailed framework for some areas of long-standing industry debate, particularly regarding how liquid staking, token buybacks, and ongoing development work on decentralized protocols should be assessed under securities law.
