SEC FAQ Update Draws Line on When Token Buybacks May Be Securities

The significance lies less in any new rule than in the SEC drawing an operational distinction: whether a buyback is executed by code in a functioning, party-less system or directed by a team distributing profits. That framing puts decentralized protocols and team-run token models on different regulatory footings without naming a formal test. The affected projects are those whose buyback mechanics depend on continued team discretion, since their legal exposure now tracks design choices rather than disclosures alone. Whether this FAQ logic hardens into enforcement posture, or remains informal staff guidance, is the open question.