SEC issues crypto guidance, mirroring CFTC after market bill fails

The guidance applies the SEC's Howey test principles to digital assets. For instance, the agency stated that token buyback programs for customers might not be considered investment contracts if the crypto system is functional and lacks a central party to manage essential managerial efforts. Similarly, systems designed to secure, maintain, or enhance functionality, or facilitate network effects, may not satisfy the Howey test. Staking receipt tokens are also noted as not always classifying as securities.

These updates come after the Senate's failure to pass a crypto market structure bill, which was expected to define the regulatory roles of the SEC and CFTC. In the absence of congressional legislation, SEC Chair Paul Atkins and CFTC Chair Michael Selig have signaled their agencies' intent to provide regulatory clarity.

Separately, SEC Commissioner Hester Peirce, often referred to as "Crypto Mom" for her advocacy for digital assets, announced on Friday that she will resign from the agency on October 2, after eight years of service. She is expected to join Regent University's law school as an associate professor in November. With Peirce's departure, the SEC's leadership will primarily consist of Republican Commissioners Atkins and Mark Uyeda.