Crypto projects that use revenue to buy back their own tokens have spent years under a legal cloud in the United States. A buyback funded by project revenue can look like a promise of profits from someone else’s work, one of the core ideas in the Supreme Court’s 1946 Howey test for an investment contract.
On Sept. 25, the U.S. Securities and Exchange Commission appeared to offer relief in an FAQ on how securities law applies to certain crypto assets and certain transactions involving them. Staff from the agency’s Division of Corporation Finance said that once a crypto network is operating as designed, announcing a token buyback would not, by itself, amount to a promise of essential managerial efforts. Pump.fun’s PUMP, which has a buy-and-burn program, rose about 10% the next day.
That language was quickly treated as a major positive for revenue-generating protocols that burn tokens. It also raised a harder question: could centralized issuers try to use the same logic as cover under securities law?
By the Monday after the FAQ first appeared, SEC staff had tightened the wording. The relief, they said, applies only where the network has no central party. In the SEC’s March interpretive release, a central party was defined as a person, entity, or group of persons or entities with operational, economic, or voting control of a crypto system.
The change matters. The original version suggested that any functional crypto network might rely on the buyback language. The revised version is much narrower. It now says the position applies where a crypto system is functional and has no central party, limiting the FAQ to networks that are not controlled by anyone.
Control, not just code, is now the key question
For token holders, the practical question is simple: who controls the network behind the token?
Unchained said in its Sept. 2 issue that buyback programs can be divided into encoded, automatically enforced rules and arrangements controlled by humans at a foundation or company. SEC staff have now turned a version of that distinction into a legal issue. The question is not only whether the program executes automatically, but who can write, change, or rewrite the buyback plan.
That means an automatic buyback is not enough on its own. A buyback may run by itself, yet still sit on top of a network that someone controls. In that case, the project may still fall outside the SEC’s relief.
Why the SEC changed the language
The Monday edit transformed what looked like a broad statement about any working network into a narrow position focused on truly decentralized systems.
Legal experts, including a16z crypto General Counsel Miles Jennings, argued that the original wording was too broad and could be misread by centralized issuers. One concern was that a startup still operating its app could sell tokens to the public, promise to buy them back with the app’s revenue, and then argue that the promise did not make the token a security.
On social media, outgoing SEC Commissioner and Crypto Task Force lead Hester Peirce said that if there is a central party, a project cannot rely on the FAQ. On Sept. 28, SEC staff wrote that limit directly into the guidance. Jennings called the edit 「great work by the SEC」. Gabriel Shapiro, a securities lawyer at MetaLeX Labs, wrote that 「it seems there is a decentralization premise here after all」.
The SEC did not say that buybacks on centralized but functional networks are illegal, nor did it say those tokens are automatically securities. What it did say, in effect, is that those cases do not qualify for this narrow form of relief. Projects with a central party, even if their networks are fully functional, remain in regulatory limbo and would still face a full, case-by-case Howey analysis.
Where the buyback money went in 2026
Unchained’s analysis says that if the biggest buyback programs of the year are run through the SEC’s no-central-party test, none of them clearly passes.
Hyperliquid (HYPE) comes closest because its buybacks execute automatically. Even so, validators operated by its foundation hold nearly half of the network’s votes, which complicates any claim that the network lacks a central party.
Most of the other programs highlighted in the chart, including those tied to PUMP, JUP and LINK, are run by companies. Many of the others, such as AAVE, SKY and LDO, are governed by committees or token-holder votes.
The chart covers spending on buybacks, burns and holder payouts by program from Jan. 1 to Aug. 31, 2026, with colors showing who runs each program. Uniswap’s figure represents fees released to people who burn UNI. Sky’s figure includes SKY bought for staking rewards. The sources listed are DefiLlama, program documentation and Unchained analysis.
According to Allium data, token buybacks reached $638 million in the first eight months of 2026. Two programs accounted for most of that spending, and only one of them runs itself. Hyperliquid spent more than twice as much as Pump.fun, while no other program came close to either one.
Automatic execution does not settle the securities question
The analysis points to a finer legal distinction. Who pulls the trigger on a buyback is evidence of control. And even a self-executing buyback can operate within a network that remains under someone’s operational, economic, or voting control.
That is why the market’s first interpretation of the FAQ as a broad green light for buyback-and-burn tokens now looks overstated. Under the revised wording, the projects that can point to this guidance are a much smaller group. The deciding factor is not only whether the network is live or whether the buyback is coded onchain, but whether there is no central party behind the system.
What remains unresolved
The article notes that the way PUMP and HYPE traded around both versions of the FAQ may offer clues about how the market prices company-run buybacks versus automatic ones. But the remainder of Unchained’s piece is behind a subscription wall. It says subscribers can read more on which of the biggest buyback programs this year may plausibly satisfy the no-central-party test, why Hyperliquid’s automatic structure may still fall short once validator voting power is counted, what the guidance may be worth after Hester Peirce leaves the SEC on Oct. 2, and bull, base and bear ranges for HYPE and PUMP together with the dates that matter for those cases.
From the portion that is publicly available, the takeaway is narrower than the market’s initial reaction. The SEC did not open the door for all token buyback and burn programs. It limited this FAQ-based relief to crypto networks that are functional and lack a central party. For projects still shaped by companies, foundations, committees, or token-governance structures, the regulatory uncertainty remains.
