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3h ago

SEC Staff Adds Three Crypto FAQ Entries Clarifying Governance and Control

The guidance supplies specific tests for when governance participants or unilateral powers amount to a central controlling party that firms can use to revise governance documents.

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Overview

  • The SEC Division of Corporation Finance added questions 1.4 through 1.6 to its crypto-assets FAQ on Monday, Nov. 2, 2026 to clarify staff views on governance and decentralization.
  • Question 1.4 says token-holders or participants do not automatically form a controlling group when they are unaffiliated and have no separate agreement to act together.
  • Question 1.5 lists unilateral powers that signal central oversight, including granting or cutting access, changing voting rules, naming validators, modifying code, reversing transactions, and revoking access.
  • Question 1.6 draws a clear line between functionality and decentralization by saying a token can work as programmed while still being controlled by a person, entity, or coordinated group.
  • The FAQ is a staff view with no legal force, but lawyers and builders are already using its language to rewrite governance docs as they await formal Commission rules, court rulings, or Congress to act.