SEC updates cryptocurrency FAQ: Clarifies that the repurchase of functional network tokens does not constitute a commitment to key management efforts

The U.S. Securities and Exchange Commission (SEC) Division of Corporation Finance updated the cryptocurrency FAQ, stating that announcing a token buyback does not constitute a commitment to "key management efforts" when the network is functional. The SEC further stated that maintaining, upgrading, or expanding a functional network, as well as promoting the existing functionalities of the network or making vague statements about visions not involving profits, do not meet the conditions related to the Howey test.

The SEC pointed out that if the network is not functional, and the issuer promotes the token buyback as a source of profit or return for holders, it may still trigger the applicability of securities laws.