The SEC has published guidance for crypto investors on when digital assets and their sale schemes qualify as an "investment contract" under the Howey test. The main point: a token by itself is not a security; its status is determined by the sale structure and profit promises based on the team's efforts.

Network updates and marketing without profit promises do not create a contract

Support, updates, and development of an already functioning network are not considered "efforts" under the Howey test. Promoting existing features and general plans without promising returns generally does not constitute an investment contract.

Buybacks of tokens from operating projects are not investment contracts

Announcing a buyback of tokens from an active project does not in itself create an investment contract. An exception may apply if the project has not yet launched and the buyback is marketed as a source of returns.

LST tokens and decentralization: when an asset is a commodity

Liquid staking tokens may be viewed as digital commodities or instruments if the underlying asset is a digital commodity and not linked to an investment contract. If the network is operational and not centrally controlled, statements by the team about it generally do not create a new investment contract.

Team and secondary market: what does not make a promoter

A change in team does not end an investment contract if the new team adopts previous promises to investors. Secondary trading alone does not make an exchange a promoter of the token.

The document emphasizes that an investment contract is a security. The provisions reflect the views of SEC staff and do not constitute new binding rules.