SEC staff says token buybacks and upgrades do not automatically make a token a security

SEC staff says buybacks alone do not make a token a security

The U.S. Securities and Exchange Commission staff said on Friday, September 25, 2026, that token buybacks, network upgrades and marketing claims do not automatically turn a crypto asset into a security. The statement came in an updated Frequently Asked Questions release from the SEC's Division of Corporation Finance.

The staff said that announcing a buyback program for an already working crypto network would not, by itself, make the token part of an investment contract. A buyback is when a project buys its own tokens back from holders.

The SEC also said the answer still depends heavily on the facts of each individual case.

Networks that are not yet up and running

The FAQ said the buyback view would not necessarily apply to a network that is not yet functional, where the issuer is pitching the buyback as a source of returns for token holders.

Development work, marketing and the Howey test

The FAQ also covered projects that keep developing after launch. The Howey test is a legal test used to decide whether an arrangement counts as an investment contract, a type of security in which people put in money expecting profit from the efforts of others.

According to the FAQ, once a crypto system is functional, services to secure, maintain, improve or enhance the system or its features, or to help build network effects, would not count as the kind of managerial effort the Howey test looks at.

Marketing a network's existing uses would generally not create an expectation of profit either, the staff said. The same applies to statements about future features, as long as those statements do not promote the potential for profit.

Where the SEC guidance fits into earlier work

The FAQ builds on the SEC's March 2026 interpretive release on how securities laws apply to crypto assets. It also comes weeks after the Clarity Act failed to advance in the Senate, leaving regulators to continue working under existing laws.

CFTC update covers tokenized assets and onchain records

The Commodity Futures Trading Commission updated its own crypto FAQ on Thursday. The update says futures firms and clearinghouses are allowed to invest customer funds in tokenized versions of previously permitted assets, as long as they meet investment and custody requirements. A tokenized asset is a digital version of an asset that is recorded on a blockchain, a shared digital ledger.

CFTC staff also said regulated firms can use blockchains for their recordkeeping, but they must be able to produce the records even if a blockchain or its block explorer is not working. A block explorer is a tool used to view activity on a blockchain.

What is confirmed

• The SEC's Division of Corporation Finance published an updated crypto assets FAQ on Friday, September 25, 2026.
• The FAQ says buybacks, network upgrades and marketing claims do not automatically make a crypto asset a security.
• The CFTC updated its crypto FAQ on Thursday with guidance on tokenized assets and blockchain recordkeeping.

What is still unclear

The SEC said the outcome depends on the specifics of each case, so the FAQ does not settle how the rules apply to any single token. The source material does not say when either agency will take further action or how the guidance will be applied in practice.

Why this matters for crypto projects and futures firms

Crypto projects often buy back tokens, upgrade their networks and promote what those networks can do. The SEC FAQ gives projects more detail on how staff view those actions. For futures firms, the CFTC update sets out what they can do with customer funds and how they can keep records.

Sources

• The Block
• SEC crypto assets FAQ
• CFTC press release

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