SEC specifies the requirements for a token redemption announcement in an operational digital asset system.

The Financial Regulatory Authority of the U.S. Securities and Exchange Commission (SEC) SEC published a FAQ on digital assets on September 25, outlining criteria for considering whether an announcement to redeem tokens of a functional digital asset system could be traded as an investment transaction.

The significance of the criterion that SEC specifies

According to the frequently asked question,[3] it is noted that a repurchase announcement of an actual operating system may not be interpreted as a pledge about core management efforts which are part of the investment commitment.

Additionally,[3] it further explains that if a functioning system has no central control, the statements of its issuers about the system are less likely to trigger a new round of investment.

The significance of this principle

The specification of SEC in this instance serves to frame the consideration that certain actions by a token issuer, such as an announcement of repurchase, may not be considered contractual obligations enabling those tokens to trade as securities under U.S. law.

However, these principles focus on a real-world digital asset system as opposed to the physical token.

It's something to keep track of.

Issuers who conduct buybacks or make statements about their systems should take a close look at the interpretation of SEC as this criterion also depends on the specific characteristics of each system, especially the issue of having or not having a central control which affects whether an issuer's statement will trigger a new round of investment.

More details can be read in the frequently asked questions about digital assets at SEC released on September 25.