SEC Publishes Updated Staff Guidance on Staking Receipt Tokens and Crypto Asset Classification

The SEC's Division of Corporation Finance published updated crypto FAQs on Sept. 25, outlining staff views on staking receipt tokens, wrapped assets, buybacks and when networks may be considered "functional." The staff document describes scenarios in which certain crypto-related activities may not amount to investment contracts under existing U.S. federal securities laws. The SEC emphasized the guidance reflects staff interpretations only and does not create new legal obligations. At the center of the update is how SEC staff assesses whether a digital asset or network activity involves ongoing managerial or entrepreneurial efforts that investors rely on for expected returns. Staff said some crypto assets may operate primarily as digital tools rather than securities, with outcomes turning on each asset's structure, purpose and how the network operates. Staking receipt tokens: staff outlines factors that may keep some tokens outside investment contract analysis The FAQs address staking receipt tokens issued by blockchain-based staking services. These tokens may represent ownership interests in underlying digital assets and help users track staked positions. Staff indicated some staking receipt tokens could function more like digital commodities in certain circumstances. The guidance also discusses liquid staking arrangements in which providers issue tokens tied to protocol-based systems. In those setups, the token may represent a claim associated with staked assets rather than a traditional investment contract. Staff stressed that classification remains highly fact-specific and depends on the particular network design and token mechanics. The SEC also noted it has not formally approved or disapproved the FAQ responses. Projects are expected to assess their own operations and structures under existing law. Functional networks and buybacks: updated views on when investment contract concerns may diminish Staff also described when a crypto network may move beyond investment contract concerns, focusing on whether an issuer continues to perform essential managerial functions for token holders. The FAQs state that network development and maintenance, standing alone, may not always constitute the type of managerial efforts tied to investment expectations. Staff added that a network can remain functional while undergoing security upgrades, software updates and community-driven development. These activities may support operations without necessarily creating an investment contract. Decentralization is cited as a relevant factor in the analysis. Crypto buybacks are addressed as well. Staff said repurchases involving active, functional networks do not automatically signal issuer efforts that support an investment contract. Buybacks marketed as generating returns could be viewed differently, depending on the surrounding facts and messaging. The guidance also notes that actions taken before a network becomes functional may carry different legal implications, making project structure and promotional methods key. Marketing statements and platform promotion: context and definitions drive the outcome The updated FAQs review how SEC staff evaluates public statements used to market crypto products and services. Staff said general communications supporting existing network utility do not automatically create an investment contract, and routine statements about network use may be treated differently than forward-looking pitches. At the same time, staff warned that promotional statements can raise concerns when they link future issuer actions to expectations of financial returns. The SEC said context and specificity matter, and companies should weigh how they describe roadmaps and planned developments. The guidance also addresses when trading platforms could be treated as "promoters." Staff said platforms must satisfy the Securities Act's existing definition of a promoter to be classified as such; operating a crypto marketplace alone does not determine promoter status. Overall, the Sept. 25 update aims to add clarity on how staff analyzes staking tokens, functional networks, buybacks and promotional activity under U.S. securities law. The SEC reiterated that each project requires an individualized assessment based on its specific conduct and design.