In brief
- The SEC’s Division of Corporation Finance said buyback announcements on functional crypto networks don’t count as promises of “essential managerial efforts” under the Howey test.
- For networks that aren’t yet functional, pitching buybacks as a source of yield or returns could still trigger securities laws.
- Attorney Gabriel Shapiro called the guidance a “loophole,” but noted it’s staff guidance without legal force that a future SEC could reverse.
Crypto projects looking to buy back their own tokens just got a green light from the SEC’s staff, with one big condition.
In new FAQs published Friday, the agency’s Division of Corporation Finance said that once a crypto system is functional, announcing a token buyback program doesn’t…
