SEC Issues New Guidance on Staking Tokens, Buybacks, and Howey Test Application

Following the failure of the CLARITY Act in the U.S. Senate on September 15, the Securities and Exchange Commission (SEC) has released new staff guidance to clarify crypto regulation. The FAQs address whether staking receipt tokens qualify as securities, noting that they may be considered digital tools or commodities if they do not grant the issuer control over the underlying assets. Additionally, the SEC stated that efforts to maintain or improve a functional blockchain network do not constitute 'essential managerial efforts' under the Howey test. The guidance also clarifies that buybacks of non-security tokens for functional systems do not inherently create investment contract concerns, provided the network is sufficiently decentralized.