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The U.S. SEC’s Division of Corporation Finance published an FAQ on its website on Sept. 25 on how federal securities laws apply to crypto assets and related transactions.
According to the FAQ, once a crypto system is sufficiently functional, continued support by an issuer or related parties for the system’s security, maintenance, improvement or user growth is unlikely on its own to be viewed as an investment contract aimed at raising the token’s price. The division also said that if no party centrally controls the system, statements by an issuer about the system’s future development or features alone are unlikely to create a new investment contract. It added that, in principle, buyback plans for functional crypto assets also do not amount to an investment contract, though the analysis could differ if the system is not yet sufficiently functional and the buyback is promoted as a way for token holders to generate profits. The SEC said the FAQ reflects the views of Division of Corporation Finance staff rather than an official SEC Commission rule or regulation, and is not legally binding.