SEC staff said on 25 September that a token buyback, a network upgrade, or a marketing claim does not, by itself, turn a crypto asset into a security when the network is already functional. The Division of Corporation Finance updated its crypto frequently asked questions, building on the Commission's March interpretive release. The staff said the answers are not a rule, have no legal force, and do not create new obligations. The Block reported the core line: announcing a buyback for an already functioning crypto network would not, by itself, make the associated token an investment contract under the Howey test. That reading does not automatically cover a network that is not yet functional, if the issuer pitches the buyback as a source of returns. Once a system is functional, work to secure, maintain, improve, or expand it, or to build network effects, would not count as the essential managerial effort Howey looks for. Promoting current uses generally would not create an expectation of profit. Statements about future features can sit outside that analysis if they do not promote profits.
Staff guidance fills a statute the Senate parked
Staking receipt tokens that represent a non-security digital commodity can be treated as a receipt, a digital tool, rather than a separate security. Operating a secondary market does not automatically make a platform a promoter under Securities Act Rule 405. The CFTC updated its own FAQ a day earlier. Staff said futures firms and clearinghouses may invest customer funds in tokenized versions of assets they were already allowed to hold, if custody and investment rules are met. They may keep records on a blockchain only if they can still produce those records when the chain or a block explorer is down. CFTC Chair Michael Selig welcomed the SEC staff update. Both notes landed after the Senate rejected cloture on the CLARITY Act on 15 September, 49 to 50, short of 60 votes. Chair Paul Atkins has said the agencies will keep using existing law while the bill is parked. This FAQ does not replace that statute, and it does not widen the five-year tokenized-stock exemption published on 22 September. A functional network is a staff concept for Howey. It is not a licence, and it is not a refund desk. See the failed cloture vote and the tokenized-stock order.