# SEC Staff Add Three Questions to Crypto-Assets FAQ on Governance and Control By Riza Dagoc Canonical URL: https://www.tokenpost.com/news/regulation/48766 Published: 2026-11-04T20:10:13.000Z Updated: 2026-11-04T20:10:13.000Z Section: Regulation > The Nov. 2 update covers governance groups, participation controls and the difference between functional and decentralized systems. The answers are nonbinding Division staff views. The Securities and Exchange Commission’s Division of Corporation Finance staff added three questions to its crypto-assets FAQ Nov. 2, clarifying how governance and access controls factor into the Division staff’s digital-commodity analysis. The update covers whether participants in broad-based governance form a group, what authority amounts to oversight of participation, and how functionality differs from decentralization. For the group question, staff frame the test as a facts-and-circumstances determination. Staff generally treat governance participants as acting separately when they have no ties to one another and have made no formal or informal arrangement—including delegation—to coordinate their actions. Staff apply that approach to governance run through an organization, association or foundation when native-asset ownership determines who can take part. That treatment does not categorically exclude the organization, association or foundation itself from being a central party. It may qualify if it holds operational, economic or voting control over another crypto system, such as by setting operational parameters for applications on that system. The second answer describes oversight as authority to control access at the protocol, validator or user level. Staff's examples include changing validator eligibility or voting procedures, rewriting code, undoing transactions and cutting off access. Staff generally see no overseer when code handles all significant ongoing functions automatically, with no human judgment involved. They also generally find no overseeing party when broad-based governance alone exercises significant discretion, if its participants are not themselves a central party. The third answer defines a system as functional when its native asset can be used according to its programmatic utility. A system is decentralized when it operates autonomously without a person, entity or group holding operational, economic or voting control. The degree of decentralization can vary with the facts and circumstances. The answers do not classify any specific token, network or governance arrangement. The additions extend the [Division’s earlier crypto-asset FAQ guidance](), first issued Sept. 25. The FAQ’s answer on group status is limited to the digital-commodities discussion in Section III of the SEC’s March 17 interpretive release, which took effect March 23; it does not apply to other statutory definitions of a group, including the Exchange Act definition of an exchange. The answers reflect Division staff views and have not been approved or disapproved by the Commission. They have no legal force or effect, do not amend applicable law and create no new obligations. ## Links in this article - [Division’s earlier crypto-asset FAQ guidance](https://www.tokenpost.com/news/regulation/26019)