Key highlights:
A staff member at the U.S. SEC said that a company announcing token buybacks on a working crypto network does not, on its own, make that token a security. The view came in a new set of FAQs issued on September 25 by the SEC’s Division of Corporation Finance.
The staff also gave guidance on staking receipt tokens and on how marketing statements are treated. It is worth noting that the answers are staff views only. The document said they have “no legal force or effect,” and the Commission has neither approved nor rejected them.
Token buybacks and the Howey test
The guidance was built on the Howey test, the standard used to decide if something is an investment contract. It asks whether people put money into a common enterprise expecting profits from the efforts of others. The FAQs focused on what counts as “essential managerial efforts.”
The staff said that announcing a buyback of a non-security token on a functional network does not amount to a promise of such efforts. Buybacks can be done for many reasons, including managing a treasury, cutting supply, or rebalancing a portfolio.
Interestingly, it’s a different case for a network that is not yet functional. In that case, staff said a buyback announcement could count as a promise of essential managerial efforts if the issuer presents it as creating yield or returns for token holders.
In the SEC’s March 2026 interpretive release, a system is tagged “functional” when its native token can be used as the system’s programmatic utility allows. The FAQs add that this differs from whether an issuer has kept its promises to buyers. That depends on the goals the issuer highlighted when selling the token.
Regulations on staking receipt tokens
The FAQs also cover receipt tokens issued when users stake crypto through a liquid staking service. The staff said a staking receipt token can be classed as a “digital tool” when it represents a digital commodity that is not subject to an investment contract.
A receipt issued by a protocol-based liquid staking provider may also qualify as a digital commodity.
The key point is what the receipt gives the holder. It proves ownership of the deposited asset and does not create extra financial benefits. The FAQs say the issuer of the receipt cannot transfer, lend, pledge or otherwise use the deposited asset, or expose it to claims from third parties. The receipt also does not guarantee or set staking rewards.
The guidance builds on an August 5, 2025 statement from the same division, which said certain liquid staking activities and receipt token transactions did not involve securities, subject to conditions.
What it means for the market
Token buybacks and liquid staking have been unclear areas for issuers, who are privy to legal risk as a result. The FAQs drew a line between functional and unfinished networks, giving projects a way to judge their regulatory risk based on how far along they are.
Some see the view on staking receipts as a positive sign for staking derivatives on large networks such as Ethereum. CryptoAmerica reporter Eleanor Terrett said the FAQ “clarifies how the March interpretive guidance applies to token functionality and staking receipts.”
Because the document is not binding, the interpretation could still change with future Commission positions or court rulings.
Source:: SEC Staff Says Buybacks Don’t Turn Crypto Tokens Into Securities