SEC staff FAQs address staking receipt tokens and buybacks

SEC staff have answered one of decentralized finance's longest-running questions, at least informally. In FAQs published September 25, the Division of Corporation Finance set out how it classifies several kinds of crypto assets, including the receipt tokens people get when they stake.

According to a summary by the law firm Lowenstein Sandler, staff treat staking receipt tokens as digital commodities or digital tools when they meet a three-part test. The FAQs also say a token buyback does not by itself create an investment contract where the underlying system is already functional.

Both points matter in practice. Receipt tokens are used across DeFi as collateral and as a way to keep staked assets liquid, and uncertainty about their status has hung over the protocols that issue them and the platforms that list them. Buybacks are a common way for projects to manage token supply, and teams have worried that running one could be read as a promise of profit.

The limit is the form. FAQs are staff guidance. They are not rules adopted by the Commission, and they can be revised or withdrawn. The stronger signal would be the same position appearing in the Commission's proposed Regulation Crypto Assets, which is the place to look next.