SEC Corporate Finance Department releases FAQ on crypto assets, clarifying that functional crypto network maintenance and upgrades do not constitute critical management efforts

On September 25th, the Corporate Banking Department of the US Securities and Exchange Commission (SEC) released a FAQ on cryptocurrency assets, stating that providing security maintenance, improvement, feature enhancement, or network effect promotion services to cryptocurrency systems once they reach a functional state is usually not considered a critical management effort as defined by Howey's testing. The FAQ points out that if the pledged receipt token only proves the holder's ownership of the underlying digital commodity and does not change the relevant rights, obligations, or benefits, it can be considered a digital tool; When issued by a protocol based liquidity collateral provider, it may also be considered a digital commodity. (Source: US Securities and Exchange Commission)