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Points of Focus
- SEC staff said buybacks of non-security crypto assets on functional networks do not, by themselves, amount to a promise of managerial efforts that creates an investment contract.
- Crypto projects spent $638 million on token buybacks through August 2026, up from $545 million over the same period in 2025.
- The regulatory clarification is narrow: How projects describe buybacks, particularly promises of yield or returns on unfinished networks, can still matter.
Crypto protocols are spending more than ever buying their own tokens. The Securities and Exchange Commission (SEC) has now clarified when those programs may matter under US securities law.
In FAQs published on Sept. 25, the SEC’s Division of Corporation Finance addressed whether announcing a buyback of a non-security crypto asset could amount to a promise of the “essential managerial efforts” relevant to investment-contract analysis.
For a functional crypto system, the answer is generally no.
SEC staff said an issuer’s announcement of a non-security token buyback would not itself constitute such a promise. The position changes, however, when a network is not yet functional and the issuer presents repurchases as creating yield or returns for tokenholders. In that case, the announcement could become relevant to whether an investment contract exists.
🚨NEW: The @SECGov just updated its crypto FAQ on token buybacks to add a stipulation that if there is no central party behind those token buybacks, then this arrangement likely does not constitute an investment contract.
It comes following comments from @a16zcrypto General… https://t.co/wSrfO9hZQN pic.twitter.com/csVnKCTLKm
— Eleanor Terrett (@EleanorTerrett) September 28, 2026
That distinction arrives as token repurchases move from an occasional experiment to a significant use of protocol revenue.
$638-million record is really a two-protocol story
Crypto projects spent $638 million on token buybacks through August, according to Allium Labs data. That compares with $545 million during the same period in 2025 and only about $366,000 during all of 2024.
But the headline number masks extreme concentration.
Hyperliquid accounted for $370 million, while Pump.fun contributed about $200 million. Together, the two represent nearly 90% of 2026 buyback spending.
The mechanisms also differ.
Hyperliquid directs protocol revenue toward purchases of HYPE, while Pump.fun uses a portion of its revenue to repurchase PUMP and permanently burn the acquired tokens. Calling both simply “buybacks” therefore obscures differences in what happens after tokens are purchased.
More importantly, repurchases do not establish that token prices will rise.
They create market demand and can reduce circulating supply when tokens are burned, but price performance still depends on factors including emissions, unlocks, trading demand, and the size of repurchases relative to the token’s market.
What did the SEC actually change?
The SEC did not create a crypto equivalent of the corporate share-buyback safe harbors or declare all token repurchases legally protected.
The FAQs are staff guidance, carry no legal force, and explicitly do not create new obligations. They instead explain how staff currently interprets the commission’s March crypto framework.
That makes the most important dividing line less about whether a protocol conducts a buyback and more about what exists when it does so and what investors are promised.
For established networks generating real revenue, the clarification removes one source of uncertainty around repurchases.
For unfinished projects marketing buybacks as a route to investor returns, the SEC left that uncertainty firmly in place.
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