US SEC Updates Crypto FAQ: Token Buybacks After Network Operation Do Not Constitute Securities

On September 28, Decrypt reported that the U.S. SEC's Division of Corporation Finance updated its crypto FAQ last Friday, stating that once a network is operational, announcing token buybacks does not constitute a 'necessary managerial effort' commitment and does not qualify as securities. Maintaining or upgrading an operational network, promoting the network's existing functionalities, and expressing non-profit visions also do not meet the Howey test. However, if the network is not yet operational and the issuer promises returns or benefits from buybacks, it may still trigger securities laws. Lawyer Gabriel Shapiro described the buyback aspect as 'beyond expectations.' Buyback protocols tracked by DefiLlama, such as HYPE, AAVE, PENDLE, ENA, and NEAR, may benefit from this update.