Morning Minute: SEC Clears Token Buybacks for Crypto Networks
The SEC’s Division of Corporation Finance updated its crypto FAQ to clarify that once a network is functional, announcing token buybacks does not count as a promise of “essential managerial efforts” under Howey. Maintaining, upgrading, or growing a working network also does not by itself make the token a security, and neither do neutral product descriptions or non-profit-focused statements. The key limit is that this does not protect issuers of non-functional networks that pitch buybacks as yield or returns. In that case, securities laws can still apply. This is a major win for live crypto protocols with revenue and buyback programs, including projects like HYPE, PUMP, ENA, AAVE, SKY, LDO, PENDLE, and others. The guidance effectively supports the model of tokens as claims on protocol cash flow, strengthening the “revenue” narrative for established networks.
