The staff of the Securities and Exchange Commission’s Division of Corporation Finance published a new set of frequently asked questions on September 25 clarifying how federal securities laws apply to crypto assets. The guidance, released in a document on the SEC’s website, follows the Commission’s March 17 interpretive release and the August 18 Regulation Crypto Assets proposal, and it answers specific questions on asset classification, staking receipt tokens, wrapped tokens, and issuer buybacks.
How the SEC classifies staking receipts and wrapped tokens
The FAQs clarify how the Commission’s classification framework treats receipt-style instruments. A Staking Receipt Token that represents a digital commodity free of an investment contract is itself a digital tool, because it serves the practical function of evidencing the holder’s ownership of the underlying asset. The staff adds that a Staking Receipt Token can also be classified as a digital commodity when a protocol-based liquid staking provider issues it, since its value then derives from the operation of a functional crypto system.
The guidance separates a receipt from other financial instruments. A receipt certifies that an asset has been deposited and does not change the holder’s rights, and the issuer cannot transfer, lend, pledge, or rehypothecate the deposited asset. Redeemable Wrapped Tokens are treated the same way, the staff notes.
What functional and decentralized actually mean
The staff explains that the definitions of functional and decentralized in the interpretive release govern how the Commission classifies a crypto asset, not whether an issuer has honored its own representations or promises. Each issuer determines the thresholds it must meet to claim functionality or decentralization in its marketing. Once a system is functional, services to secure, maintain, improve, or enhance it, or to fund development that builds network effects, would not involve essential managerial efforts, a point tied to the Regulation Crypto Assets proposal.
Buybacks and trading platforms
The FAQs address issuer buyback programs used for treasury management, supply reduction, protocol-funded burns, and rebalancing. Where a crypto system is functional, announcing a buyback would not constitute a representation or promise to undertake essential managerial efforts. Where the system is not functional, the staff warns the same announcement could qualify if the issuer presents the buyback as creating yield or return for holders.
The guidance extends the SEC’s 2026 effort to define how securities rules apply to digital assets, following the March interpretive release issued with the CFTC. The FAQs state they are staff views, not a rule or statement of the Commission, and carry no legal force.
