SEC Clarifies Token Buyback Programs Do Not Automatically Constitute Securities

The SEC's Division of Corporate Finance has issued new guidance stating that token buyback programs for functional crypto networks do not necessarily constitute "essential managerial efforts" under the Howey test. While buybacks for non-functional networks could still be viewed as investment contracts if marketed as profit-generating, the agency clarified that post-launch maintenance or expansion promises do not satisfy the criteria for a security. Legal experts noted that this guidance provides significant flexibility for issuers to support token prices without granting shareholder rights.