The U.S. Securities and Exchange Commission’s Division of Corporation Finance has updated its cryptocurrency FAQ, clarifying that a token buyback announcement does not amount to a promise of "key managerial efforts" when a network is already functional. The agency also said that maintaining, upgrading, or expanding a functional network, promoting the network’s existing features, or making broad vision statements that do not involve profit do not satisfy the relevant conditions under the Howey test. At the same time, the SEC drew a line for projects whose networks are not yet functional. In those cases, if an issuer markets a token buyback as a source of profit or return for holders, securities laws may still apply. The update was reported by Decrypt and adds detail to how the SEC staff views token-related statements in different stages of network development.
The U.S. Securities and Exchange Commission’s Division of Corporation Finance has updated its cryptocurrency FAQ, saying that when a network is already functional, announcing a token buyback does not constitute a promise of "key managerial efforts."
SEC sets out how it views statements tied to functional networks
The SEC said that maintaining, upgrading, or expanding a functional network also does not meet the relevant conditions under the Howey test. The same applies to promoting a network’s existing functionality or making broad vision statements that do not involve profit.
Non-functional networks may still raise securities law issues
The agency added that if a network is not yet functional, securities laws may still apply when an issuer markets a token buyback as a source of profit or return for holders.
The update was reported by Decrypt.
This article was originally published by Bit.Fan. For more cryptocurrency news and market insights, visit www.bit.fan. Disclaimer:
The market information, project data, and third-party content displayed on this platform are for industry information sharing only and do not constitute any form of investment advice or return commitment.
Cryptocurrency trading carries high risks. Users should fully assess their risk tolerance and make independent decisions. All profits, losses, and legal responsibilities are borne by the users themselves.
