SEC Updates Crypto FAQ on Token Buybacks and Network Upgrades

The SEC's Division of Corporation Finance updated its crypto asset FAQ, clarifying that token buybacks, network upgrades, and marketing do not automatically classify crypto assets as securities. Buybacks on functional networks do not inherently constitute investment contracts, though this may differ for non-operational networks. The SEC also noted that ongoing development for system maintenance or enhancement does not necessarily qualify as managerial efforts under the Howey Test. Separately, the CFTC updated its own FAQ, allowing futures commission merchants and clearinghouses to invest customer funds in tokenized versions of permitted assets under specific conditions.