SEC Staff Adds Central-Party Test to Token Buyback Guidance
The revised FAQ says buyback announcements generally avoid implying managerial promises only when a crypto system is functional and has no central party.
SEC staff added a no-central-party condition to its guidance on token buyback announcements, narrowing when such plans generally avoid being treated as promises of essential managerial efforts.
The Securities and Exchange Commission’s Division of Corporation Finance updated Question 2.5 in its crypto-asset FAQ on Sept. 28. The revised guidance says an announcement involving a non-security crypto asset generally would not constitute such a promise when the underlying system is functional and has no central party.
If the system is not functional, the announcement could qualify as a promise of managerial efforts when it is presented as creating yield or returns for token holders.
The change shifts attention from the size of a buyback to who can control the program and the broader crypto system. Pump.fun has described some purchases as automatically executed by code, while other purchases may be started, stopped or changed.
Aave paused its buybacks in April after an rsETH bridge incident, illustrating how governance bodies or committees can retain discretion over repurchase activity. The SEC FAQ reflects staff views and has no legal force or effect.
