SEC Issues New Crypto Guidance Following CFTC Move After CLARITY Act Fails
Regulators act after legislative gridlock
The US Securities and Exchange Commission (SEC) has updated its guidance on how federal securities laws apply to certain crypto assets and transactions. This move comes shortly after the US Commodity Futures Trading Commission (CFTC) issued similar staff guidance. Both actions occurred days after the US Senate failed to pass the CLARITY Act, a bill intended to define the regulatory roles of these agencies over digital assets.
SEC Chair Paul Atkins and CFTC Chair Michael Selig released statements indicating that their agencies would proceed with addressing crypto regulation even without new laws passed by Congress. The updates were published as answers to frequently asked questions (FAQs) on the SEC website.
Key details in the new guidance
- The SEC stated that its new interpretation of rules is non-binding and creates no new legal obligations.
- Token issuers may run buyback programs for customers if the crypto system is functional and has no central party managing it.
- Crypto networks that are functional and serve to secure or improve the system may not automatically meet the criteria for an investment contract.
- Tokens representing staking receipts will not always be classified as securities under the agency's current view.
- The guidance specifically references the "Howey test," a standard used to determine if a transaction qualifies as an investment contract.
Context from the CFTC and Senate
The SEC's announcement followed a similar move by the CFTC, which also provided guidance to token issuers. These developments happened after the Senate voted against advancing the CLARITY Act. Many observers had expected this legislation to clarify the distinct roles of the two financial regulators regarding digital assets.
Leadership changes at the SEC
Commissioner Hester Peirce, often called "Crypto Mom" for her support of digital asset policies, announced she will resign from the SEC on October 2. She served for eight years and plans to join Regent University in Virginia as an associate professor in November.
Her departure leaves SEC Chair Paul Atkins and Commissioner Mark Uyeda, both Republicans, leading the agency. The commission typically has five members, including two Democratic seats. As of Monday, President Donald Trump had not named replacements for Peirce or the vacant Democratic positions.
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