The SEC’s Division of Corporation Finance published FAQs stating that token buyback announcements on functional crypto networks do not constitute promises of “essential managerial efforts” under the Howey test. This means functional crypto projects can announce buyback programs without being classified as securities. For non-functional networks, however, framing a buyback as a source of yield could still violate securities laws. Attorney Gabriel Shapiro called this guidance a “loophole,” while noting it is staff guidance without legal force that a future SEC could reverse.
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