The SEC’s Division of Corporation Finance updated its crypto asset FAQ on September 28, 2026. The update builds on the original FAQ published September 25 and on the landmark March Interpreti
The SEC’s Division of Corporation Finance updated its crypto asset FAQ on September 28, 2026. The update builds on the original FAQ published September 25 and on the landmark March Interpretive Release that classified XRP as a digital commodity.
Prominent crypto analyst EGRAG CRYPTO (@egragcrypto) shared a breakdown on X, highlighting what the updated guidance means for the space.
The update does not carry the force of law. The SEC staff acknowledges as much in the document itself. Still, the guidance sharpens the legal architecture around crypto classification in ways that are significant for XRP.
SEC JUST CLARIFIED SOMETHING BIG FOR CRYPTO
The SEC staff’s updated crypto FAQs sharpen an important distinction:
Crypto asset ≠ automatically an investment contract
— EGRAG CRYPTO (@egragcrypto) October 2, 2026
EGRAG CRYPTO pulled out a key theme from the FAQ: functionality, utility, and decentralization are central to how the SEC assesses crypto assets. The updated document addresses what happens once a crypto system reaches functional status. At that point, activities to secure, maintain, or improve the network no longer constitute essential managerial efforts under the Howey test.
The Howey test is the legal standard that determines whether an asset qualifies as a security. Removing network maintenance from the “essential managerial efforts” category narrows the path to securities classification for functional networks.
XRP operates on a functional, decentralized network. The March Interpretive Release explicitly named XRP as a digital commodity. The September FAQ reinforces that status by clarifying the criteria that keep a functional network outside investment contract territory.
The updated FAQ also addresses promotional activity. Promoting a crypto system’s current utility does not automatically constitute a representation or promise to engage in essential managerial efforts. EGRAG CRYPTO highlighted this point specifically. Utility-focused promotion carries a different legal character than promotional statements tied to profit expectations.
The FAQ goes further on buybacks. A functional crypto system with no central party, announcing a buyback program, would not constitute a representation or promise of essential managerial efforts. The analyst identified this as one of the update’s notable clarifications. It gives decentralized, functional networks more operational flexibility.
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This update is part of a broader regulatory shift the SEC has built through 2016 guidance. The March Interpretive Release established XRP’s commodity status. The original September 25 FAQ built on that release. The September 28 update further refines it.
EGRAG CRYPTO’s summary of the document centers on one core takeaway: functionality, utility, and decentralization are the SEC’s assessment framework. XRP checks each of those criteria under the existing guidance. Institutions assessing XRP now have additional staff-level guidance supporting its commodity classification.
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