SEC Staff: Token Buybacks Won't Trigger Securities Status for Functional Crypto Networks

The SEC's Division of Corporation Finance said on Friday, September 25, 2026, that token buyback programs do not constitute a promise of "essential managerial efforts" once a crypto network is functional — a key prong of the Howey test for determining whether an asset is a security. In new FAQs carrying no legal force, staff said the analysis changes for non-functional networks, where a buyback could cross the line if pitched as generating yield or returns. Post-functionality promises to maintain, upgrade or grow a network, along with vague aspirational statements that don't tout profit, would likely not satisfy Howey. The guidance builds on the SEC's March interpretive release and its Regulation Crypto Assets proposal, which would allow token sales without full registration, and follows a new innovation exemption for tokenized stocks after the Clarity Act failed in the Senate. Attorney Gabriel Shapiro said the buyback section "goes further than I expected," warning projects could gain equity-style benefits without shareholder rights — a loophole he said a future SEC or private plaintiff could challenge.