SEC Hands Crypto Projects a Buyback Hall Pass—Just Don't Promise the Moon First 🌙

The SEC's Division of Corporation Finance published updated crypto FAQs on Friday stating that once a network is functional, announcing a token buyback program does not constitute a promise of "essential managerial efforts" under the Howey test. The staff said that for non-functional networks, a buyback announcement could still cross the line into securities territory if the issuer pitches it as generating yield or returns for holders. The guidance also clarified that after a network is functional, promises to maintain, upgrade, or grow it do not satisfy Howey, and that promoting a system's current uses or making vague aspirational statements that do not tout profit likely would not either.

Gabriel Shapiro, a corporate securities attorney at MetaLeX Labs and former general counsel at Delphi Labs, said the buyback section "goes further than I expected." He wrote on X that "the securities laws are starting to look opt-in now, at least as applied by the SEC to crypto." Shapiro added that teams can now continue building and supporting prices through buybacks while retaining many of the benefits of a public investment without granting holders shareholder-style rights, writing that regulators "have opened a loophole in a regulatory regime whose whole point was supposed to be that you couldn't draft your way around economic reality."

The FAQs, which carry no legal force, build on the SEC's March interpretive release and its Regulation Crypto Assets proposal that would let projects sell tokens without full registration. They follow the agency's recently unveiled innovation exemption for tokenized stocks, issued after the Clarity Act failed in the Senate on a 49-50 procedural vote. SEC Chair Paul Atkins had signaled in July that the agency would step in if the bill faltered, and the CFTC issued a similar warning in August. Shapiro noted that "a private plaintiff or a future SEC could have other ideas," underscoring that agency guidance remains easier to unwind than statutory law.

DefiLlama tracks buyback programs at HYPE, PUMP, ENA, AAVE, SKY, LDO, PENDLE, AERO, RAY, JTO, NEAR, ETHFI, SYRUP, LIT, ASTER, KMNO, MET, CC, CARDS, PONS, and STONK, among others. Hyperliquid routes USDC reserve yield into HYPE buybacks under AQAv2. Pump.fun has burned $451 million, about 16.6% of supply. Pons sends roughly 80% of V1 revenue to buybacks. Ethena's holders voted to route 95% of net revenue to ENA.