SEC staff narrow their crypto token buyback answer three days after issuing it: "no central party" now required

The SEC's Division of Corporation Finance on Monday revised the crypto FAQ it published on Friday, tightening its answer on token buybacks. The updated page, dated September 28, says Question 2.5 was changed "to add 'and has no central party.'" Cointelegraph framed the FAQs as the SEC following the CFTC in issuing staff guidance after the Senate failed to advance the Clarity Act market structure bill.

What changed, word for word

Question 2.5 asks whether an issuer's announcement of a buyback of a non-security crypto asset counts as a promise to undertake "essential managerial efforts," the part of the Howey test that can turn a token sale into a securities offering. The SEC lists the reasons issuers run such programs: treasury management, supply reduction, protocol-funded burns and rebalancing.

The answer now reads that where a crypto system "is functional and has no central party," a buyback announcement would not be such a promise. The words "and has no central party" were added Monday. The answer still says that where a system is not functional, a buyback announcement could be a promise of managerial effort if the issuer presents it as creating yield or return for token holders.

The thing the headline misses

It is easy to read any new crypto FAQ from this SEC as another easing step. This particular change goes the other way. On Friday, an issuer only needed a functional network for the staff's buyback comfort to apply. As of Monday it needs a functional network with no central party. A project whose foundation or development company still controls upgrades, a treasury or admin keys may clear the first test and fail the second, and for that project the staff's buyback answer no longer applies.

It lines up with another answer in the same document. Question 2.4 says that once a functional system has no central party, an issuer's statements "likely would not" create a new investment contract, because nobody has the control needed to affect its success. The buyback answer now uses the same two-part test.

What the FAQs are, and are not

The page says the answers are the views of staff, "not a rule, regulation or statement of the Securities and Exchange Commission," and that they "have no legal force or effect." They build on the Commission's interpretive release of March 17, 2026, and cite the proposed Regulation Crypto Assets from August. Other answers say staking receipt tokens for a non-security digital commodity are generally "digital tools," that promoting a network's current utility is not, without more, a promise of managerial effort, and that a trading platform is a "promoter" only if it meets the definition in Securities Act Rule 405.

Guidance that can change over a weekend is exactly the durability problem we flagged when Hester Peirce announced her departure and after the Clarity Act failed: staff answers are easier to issue than rules and just as easy to revise.

What traders are watching

For traders in tokens with buyback or burn programs, the practical question is who controls the network, not only whether it works. Watch for projects clarifying governance, and for whether the Commission itself, down to two members after Peirce leaves on October 2, adopts any of this in a rule.

Sources: SEC Division of Corporation Finance FAQs, Cointelegraph. This is market information, not investment advice.