Overview
- The SEC Division of Corporation Finance expanded its crypto FAQ with three new entries that explain how shared governance, control over network access, and decentralization affect token classification.
- The staff says participants in on‑chain or organization‑based governance are not automatically a controlling group when they are unaffiliated and lack a separate agreement to act together.
- The guidance lists unilateral authorities that can signal central oversight, such as granting or restricting access, changing voting rules, choosing validators, modifying code, reversing transactions, or revoking keys.
- The FAQ draws a clear line between a token working as intended and the system being decentralized, defining decentralization as operation without any person, entity, or coordinated group holding operational, economic, or voting control.
- Industry reaction welcomed practical clarity for legal designs like DUNAs but stressed the entries carry no legal force, apply only to the digital‑commodity portion of the March taxonomy, and could be altered by future rulemaking or legislation such as the CLARITY Act.