SEC Updates Crypto Rules After CLARITY Act Vote Fails
The US Securities and Exchange Commission (SEC) has updated its guidance on how federal securities laws may apply to certain crypto assets and digital asset transactions, days after the Senate failed to advance the CLARITY Act.
The agency added new answers to its frequently asked questions, building on guidance first published in March. The SEC stressed that the material is an interpretation of existing rules rather than a new regulation. It said the guidance is non-binding, carries no legal force, does not change existing law and does not create additional obligations for market participants.
The updated guidance focuses on the application of the Howey test, which is used to determine whether an asset or transaction qualifies as an investment contract under US securities laws.
One area addressed by the SEC is token buybacks. The agency said certain buyback programs could take place without the related crypto asset necessarily being treated as a security, provided the underlying crypto system is functional and does not rely on a central party. In such cases, the arrangement may not involve a representation or promise that a party will perform the managerial efforts required under the Howey framework.
The SEC also provided additional guidance concerning crypto networks. According to the agency, activities that support the operation, security, maintenance or improvement of a functioning network, as well as efforts designed to encourage network participation, would not automatically satisfy the Howey test.
Staking receipt tokens were also addressed. The SEC said these assets would not necessarily be classified as securities, indicating that their treatment depends on the specific structure and circumstances involved.
The policy update comes shortly after the Commodity Futures Trading Commission (CFTC) released its own crypto-related guidance. The two agencies issued their respective staff interpretations after lawmakers failed to move forward with the CLARITY Act, legislation that was expected to provide greater clarity over how digital assets would be divided between the SEC and CFTC.
SEC Chair Paul Atkins and CFTC Chair Michael Selig have both indicated that their agencies will continue addressing questions around crypto regulation while Congress works on legislation.
The SEC is also facing a change in its leadership. Commissioner Hester Peirce said Friday that she plans to leave the agency on Oct. 2 after eight years at the SEC. Peirce, who has often supported more crypto-friendly regulatory policies, is expected to become an associate professor at Regent University’s law school in November.
Following her departure, the SEC will have three commissioners: Chair Atkins and Commissioner Mark Uyeda, both Republicans, alongside the agency's two Democratic seats. As of Monday, President Donald Trump had not announced replacements for Peirce or the vacant Democratic positions.