The U.S. SEC has released new guidance explaining when crypto assets and related activities can fall under federal securities laws. The update covers token sales, staking receipt tokens, buybacks, and network upgrades.
This gives crypto firms clearer guidance on when a token may be tied to an investment contract under the Howey test.
When Crypto Assets Can Become Investment Contracts
The SEC’s Division of Corporation Finance issued the guidance on September 25, building on its March 2026 Interpretive Release.
The SEC said a crypto asset may be treated as part of an investment contract when buyers invest money with the expectation of profits from the essential managerial efforts of others. This is based on the Howey test, which courts use to determine whether an arrangement qualifies as an investment contract.
Simply promoting a crypto network’s current uses or future features would generally not be enough, especially when the statements do not mention potential profits.
However, the situation can change when an issuer makes clear promises about future work and links those efforts to potential profits for buyers. The SEC said such statements could create a reasonable expectation of profit.
Once a crypto system becomes functional, activities such as securing, maintaining or improving the network would generally not count as essential managerial efforts.
Clarification for Functional Crypto Networks and Buybacks
The guidance also addresses what happens after a crypto system becomes functional. Once a network is working, activities such as maintaining, securing, or improving it generally would not count as the type of essential managerial work required under the Howey test.
The guidance goes further for networks without a central controlling party. In that case, statements from the original issuer would generally not create a new investment contract because the issuer no longer controls whether the network succeeds or fails.
Crypto buybacks also received clearer treatment. For a functional network, announcing a buyback of a non-security crypto asset generally would not create an investment contract.
However, the situation can change if the network is not yet functional and the issuer promotes the buyback as a way to generate returns for token holders.
SEC Clarifies Staking Tokens and Crypto Receipts
The FAQs also provide clarity around liquid staking. According to the SEC, a staking receipt token can be treated as a digital tool when it represents ownership of an underlying digital commodity that is not subject to an investment contract.
In some cases, a staking receipt token issued by a protocol-based liquid staking provider may instead qualify as a digital commodity.
The SEC also explained that a “receipt” is different from other financial instruments because it simply proves ownership of an underlying asset. The receipt issuer cannot transfer, lend, pledge, or otherwise use the deposited asset.