The Division of Corporation Finance staff at the U.S. Securities and Exchange Commission issued frequently asked questions on September 25, 2026, addressing how federal securities laws apply to crypto assets, and revised the buyback discussion three days later.

The FAQs clarify the SEC's March 17, 2026 Interpretive Release, which set out how an investment contract under SEC v. W.J. Howey Co. forms in crypto transactions, and reference views expressed in the agency's August 18, 2026 proposing release for Regulation Crypto Assets. Staff labels the FAQs as having "no legal force or effect," and the Commission has approved or disapproved nothing. Regulation Crypto Assets, including the proposed investment-contract safe harbor in Rule 400, remains a proposal.

Comments on the proposing release are due October 20, 2026. Market participants that rely on the staff positions may ask the Commission to incorporate them into any final rules or adopting release. Staff views can shift, as the September 28 revision to FAQ 2.5 shows.

What the FAQs actually cover

The staff addresses five areas central to issuers, deal counsel and venues:

• Marketing and essential managerial efforts
• Functionality and decentralization
• Assumption of promises in acquisitions
• Staking receipt tokens
• Trading platform promoter status

When does marketing cross into a promise?

FAQ 2.1 draws the line at context. Promoting a system's current utility and capabilities likely would not, on its own, constitute a promise of essential managerial efforts. Indefinite aspirational statements about future features likely would not either, provided those statements do not promote profit potential. The inquiry depends on facts and circumstances.

FAQ 2.3 carries that logic into post-launch operations. For a functional system — one whose native crypto asset can be used in accordance with its programmatic utility — securing, maintaining, improving or enhancing the system, or facilitating network effects, does not involve essential managerial efforts.

The September 28 revision of FAQ 2.5 added that, on a functional system with no central party, an issuer's announcement of a buyback of a non-security crypto asset would not constitute such a promise. The revision does not resolve buyback treatment for functional systems that retain a central party. On nonfunctional systems, the staff continues to treat a buyback announcement as a possible promise if the issuer frames it as yield or return for holders.

Does assuming the issuer's promises end the investment contract?

No, per FAQ 2.2. If another party assumes an issuer's promises, by affirmation or operation of law, the assumption does not separate the non-security crypto asset from its investment contract. The FAQ leaves open whether a specific transaction results in assumption, which turns on transaction structure, governing law and the parties' undertakings. Counsel should allocate responsibility for outstanding commitments — and for potential liability for earlier offerings — through indemnities, escrows or covenants.

How does the staff measure functionality and decentralization?

FAQ 1.1 treats classification and performance as separate questions. The SEC's definitions of "functional" and "decentralized" govern classification under Section III of the Interpretive Release. Whether the issuer delivered the functionality or decentralization it promised depends on the issuer's own descriptions in white papers and other communications.

FAQ 2.4 narrows a concern raised in earlier commentary: post-filing issuer statements about a functional system with no central party likely would not create a new investment contract, because no party could meaningfully affect the system's success or failure. The same assurance does not extend to systems that retain a central party.

When is a staking receipt a digital commodity?

FAQ 1.2 says a staking receipt token that evidences ownership of a digital commodity not subject to an investment contract is a "digital tool." If a protocol-based liquid staking provider issues it, the staff would also treat it as a digital commodity, on the theory that its value derives from the programmatic operation of a functional crypto system and from supply and demand.

FAQ 1.3 sets the conditions. The receipt certifies the amount deposited with the issuing depository and evidences the depositor's ownership. It does not change the underlying asset's rights, obligations or benefits, and ownership does not pass to the issuer. The issuer cannot transfer, lend, pledge, rehypothecate or otherwise use the deposited asset, or subject it to third-party claims. Rewards accrue on the underlying asset; the receipt itself does not create or guarantee them.

Does running a secondary market make a platform a promoter?

Not automatically. FAQ 2.6 says a trading platform offering a secondary market is a promoter only if it meets the Securities Act Rule 405 definition tied to founding or organizing the issuer's business. The FAQ addresses promoter status alone, and does not resolve whether a platform could otherwise act as an issuer affiliate or agent.

What registration questions remain open?

Regulation Crypto Assets does not propose exemptions from the Exchange Act definitions of "exchange," "broker" or "dealer." The SEC's September 17, 2026 innovation exemption supplies temporary, conditional relief for certain venues trading tokenized NMS stock; it is not a general carve-out for crypto platforms. The Division of Trading and Markets has its own FAQ set, last updated February 19, 2026, covering broker-dealer custody, net capital and trading in crypto asset securities paired with non-security crypto assets on exchanges and ATSs.

What market participants should do next

• Issuers. Review white papers, marketing and other communications for promised work and defined returns, and how functionality and decentralization are described. Before announcing a buyback on a nonfunctional system, avoid framing it as yield or return.
• Buyers. Identify outstanding commitments and assess whether a transaction would result in another party assuming them; allocate exposure in the deal documents.
• Staking providers. Test receipt arrangements against the staff conditions, particularly whether the provider can use the deposited assets or offers financial benefits beyond the underlying rewards.
• Broker-dealers, platforms, advisers and funds. Reanalyze positions that depend on whether a crypto asset is a security, including Exchange Act registration, custody and Investment Company Act status.

The October 20, 2026 comment window will set the timeline for any final rulemaking, and an adopting release would likely become the vehicle for codifying — or reshaping — the staff positions the FAQs now restate.