[SEC and CFTC Release Updated Crypto FAQs: Token Buybacks and Network Upgrades Do Not Necessarily Constitute Securities, CFTC Allows On-Chain Recordkeeping] BlockBeats News, September 26 – On September 25, the U.S. Securities and Exchange Commission (SEC) Division of Corporation Finance released an updated FAQ, clarifying that token buybacks, network upgrades, and marketing statements do not automatically render crypto assets as securities. SEC staff noted that announcing a buyback program for an already operational crypto network does not, in itself, make the related tokens an investment contract. However, if the network is not yet operational and the issuer promotes the buyback as a source of returns for holders, the situation may differ. The FAQ further clarified that once a crypto system is operational, services provided to secure, maintain, improve, or enhance the system or its functionality, or to promote network effects, do not constitute managerial efforts under the Howey Test. Marketing the current utility of the network typically does not create an expectation of profit, nor do statements about future functionality, provided they do not promote profit potential. The update reiterated that conclusions will remain highly case-specific and are based on the interpretive release on the application of securities laws to crypto assets issued by the SEC in March of this year. On the same day, the Commodity Futures Trading Commission (CFTC) updated its crypto FAQ, allowing futures commission merchants and clearinghouses to invest customer funds in tokenized versions of previously permitted assets, provided investment and custody requirements are met. CFTC staff also stated that regulated entities may use blockchain for recordkeeping, but they must ensure records can still be provided if the blockchain or its block explorer becomes inoperable. These updates come as the CLARITY Act failed to advance in the Senate, with regulators continuing to develop a crypto regulatory framework under existing laws. [Original Link]