27 September 2026
SEC Guidance Highlights Impact of Crypto Issuer Promises on Securities Classification
The U.S. Securities and Exchange Commission (SEC) has recently provided clarity on how the promises made by crypto issuers can significantly affect the classification of tokens as securities. This guidance, issued on September 25, outlines key factors that determine whether a non-security token is treated as part of an investment contract.
According to the SEC's Division of Corporation Finance, the expectations of profit from the issuer's efforts remain central to this analysis. If buyers anticipate returns based on the issuer's promised work, the token may be classified as a security, even if it is not inherently one.
The SEC's FAQs indicate that marketing claims, network functionality, and buyback announcements are critical in this determination. For instance, while describing a network's current uses may not imply essential managerial efforts, broad future promises could lead to securities treatment if they suggest potential profits.
Moreover, the guidance highlights that later token sales might also be subject to securities regulations as long as the promises remain tied to the asset. This means that issuers must navigate these complexities carefully to avoid potential legal pitfalls.
In addition, the SEC clarifies the treatment of buyback announcements, stating that such claims could be interpreted differently based on the network's stage of development. For functional networks, buybacks may not constitute a promise of essential managerial efforts, while for unfinished networks, they could imply such promises if positioned as yielding returns for token holders.
Overall, the SEC's insights underscore the importance of transparency and clarity in the promises made by crypto issuers, as these can significantly impact the regulatory landscape surrounding crypto assets.
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