US SEC Updates Crypto FAQ: Token Repurchases Without Centralized Entities May Not Constitute Investment Contracts

TechFlow reported on September 29 that the U.S. Securities and Exchange Commission (SEC) recently updated the token buyback section of its frequently asked questions (FAQ) on cryptocurrencies. The new guidance explicitly states that if a token buyback is not backed by a centralized entity, the buyback arrangement typically does not constitute an Investment Contract.

Previously, Miles Jennings, general counsel and policy lead at the Andreessen Horowitz crypto fund (a16z Crypto), had raised concerns about this, noting that earlier phrasing could indirectly result in issuers being deemed to have created Investment Contracts when announcing buyback plans due to a lack of clear boundaries.