The SEC on Friday updated its frequently asked questions section on how federal securities laws may apply to "certain types of crypto assets and certain operations involving them," echoing the CFTC, which last week issued similar guidance for token issuers.

Guidance is non-binding and does not change the law

The SEC clarified that the interpretations in the FAQ are not legally binding, do not alter or supplement existing law, and do not create new obligations. The answers address scenarios that fall under the Howey test for investment contracts.

Buybacks and the absence of a "central party"

According to the agency, token buyback programs are possible without automatically qualifying as investment contracts if the crypto system is functional and there is no "central party" whose significant managerial efforts are promised to investors.

Functional networks and staking receipt tokens

The SEC also stated that a system that is functional and where services are aimed at ensuring, maintaining, or improving functionality or network effects does not necessarily meet the Howey test. Similarly, staking receipt tokens will not always be classified as securities.

Context: CLARITY Act setback and regulatory actions

The update followed the Senate's failure to advance the crypto market structure bill (CLARITY Act), which was expected to clarify the roles of financial regulators over digital assets. SEC Chair Paul Atkins and CFTC's Michael Selig said the agencies would continue to regulate the crypto industry in the absence of new Congressional laws.

Commissioner Hester Peirce to step down October 2

After eight years at the SEC, Commissioner Hester Peirce announced Friday that she will resign on October 2 and in November will become an associate professor at Regent University School of Law in Virginia. After her departure, leadership at the commission will focus on Atkins and Commissioner Mark Uyeda; both are Republicans on the typically five-member body. As of Monday, U.S. President Donald Trump had not announced possible replacements for Peirce or the two vacant Democratic seats.