SEC Staff Says Independent Token Voting Generally Does Not Make Voters a Central Party

SEC staff says broad-based token governance generally does not make voters a “central party” when they participate independently, while coordinated control or unilateral authority over key system functions can indicate oversight of a crypto system.

The distinction turns on how voting power is exercised. A broad group taking part without coordination generally does not become a central party solely by voting. Coordination separates independent participation from collective control.

The staff also identifies unilateral authority over key functions as a sign that an actor may oversee the system. This puts emphasis on who can direct important system functions, rather than on the existence of token voting alone.

For projects that use token governance, the clarification draws a line between participation and control. Broad participation alone is generally not enough to make voters a central party, but coordinated action or one actor’s unilateral system authority can change how that role is viewed. The issue is the role an actor plays in system governance, not simply the presence of a vote.