09-30-2026 
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TL;DR: The SEC clarified its crypto buyback guidance after industry lawyers flagged a potential securities-law loophole, while Commissioner Hester Peirce prepares to leave the agency with several SEC and CFTC seats vacant. Meanwhile, SEC officials are pushing back on criticism of FY2026 enforcement numbers, as the agency faces scrutiny over a high volume of delinquent-filer cases alongside new crypto fraud actions.
Key Takeaways:
- The SEC issued and then clarified its token buyback guidance after questions emerged over how broadly the original language could apply.
- Hester Peirce’s exit leaves less than one-third of SEC/CFTC seats filled, while the CFTC continues operating with a single commissioner.
- SEC enforcement statistics are drawing scrutiny as critics focus on the volume and type of cases filed during FY2026.
America’s securities regulator is discovering that rushing to deregulate the digital asset space can sometimes create more confusion than clarity.
On September 25, the Securities and Exchange Commission (SEC) issued an FAQ on the “Application of the Federal Securities Laws to Certain Types of Crypto Assets and Certain Transactions Involving Crypto Assets.” This FAQ reflects the views of the staff of the SEC’s Division of Corporation Finance and, like all FAQs, carries no legal weight and doesn’t represent official SEC policy.
The SEC’s FAQ was issued the same day that the Commodity Futures Trading Commission (CFTC) released a similar FAQ. Following the failure of the Senate’s digital asset market structure bill (the CLARITY Act) in mid-September, both the SEC and the CFTC have been moving swiftly to revise rules governing digital assets within their respective jurisdictions.
The SEC FAQ builds on an interpretive release issued in March that sought to establish boundaries around what does and doesn’t constitute a ‘security’ when platforms issue tokens. Among the questions asked/answered in the FAQ are whether non-security token issuers can conduct buyback programs without triggering the ‘efforts of others’ plank of the Howey test for identifying securities.
The original answer to Question 2.5 of the FAQ stated that “where a crypto system is functional, an issuer’s announcement of a non-security crypto asset buyback program would not constitute a representation or promise to undertake essential managerial efforts.”
However, if said tokens resided on a network that wasn’t yet functional (and thus control hadn’t been sufficiently decentralized), a buyback announcement could fall afoul of Howey “if the issuer presents the buyback as creating yield or return for token holders.”
This statement was immediately challenged by Miles Jennings, general counsel for the extremely crypto-friendly Andreessen Horowitz (a16z) venture capital group (NASDAQ: ZADIHX). In a since-deleted tweet, Jennings warned that, as written, “any startup can tokenize any revenue stream, sell those tokens to the public, and avoid securities laws.” Jennings called this “maybe the biggest loophole ever. No way this holds up in court or any future administration. Just absurd.”
SEC commissioner Hester Peirce replied to Jennings, saying, “Maybe it wasn’t clear, but if you have a central party, you can’t rely on this FAQ.” Jennings disagreed, noting that other sections of the FAQ were limited to central parties, but “reading a central party limit into Question 2.5 is illogical, as the question explicitly contemplates the buyback being conducted by an issuer (i.e., a central party).”
Peirce stood her ground, telling Jennings, “You have to read it in the broader context of the interp[retation].” But others shared Jennings’ concern, with one saying, “It looks to me and every other lawyer I’ve talked to like a massive loophole is being opened where a high-reputation team can just make no promises/representations and be outside the securities laws.”
The debate raged over the weekend, then the SEC issued a revised FAQ on Monday, clarifying that 2.5 applies “where a crypto system is functional and has no central party.” (Emphasis added.) Jennings was quick to praise the “great work by the SEC,” letting them off the hook by adding that “this stuff is super complicated and industry lawyers get a lot more looks than SEC staff.”
Help wanted at SEC/CFTC … or is it?
Peirce won’t have long to respond to these types of queries, at least, not officially, as she announced last week that Friday, October 2, would be her last day on the job. In a letter to President Trump, Peirce said she felt “confident” in leaving the SEC “under the excellent leadership of Chairman Paul Atkins and Commissioner Mark Uyeda.”
Peirce’s departure after eight years in the role will leave three empty commissioner seats at the SEC, with no warm bodies yet nominated by Trump to fill them. The situation is even more dire at the CFTC, which has been under the control of a single individual (currently chairman Michael Selig) for over a year.
The soon-to-be-seven CFTC/SEC empty seats were a minor contributor to CLARITY’s failure, as Senate Democrats blamed Trump for not doing his job by nominating new candidates, including members of the minority party. (All three remaining CFTC/SEC seat-fillers are Republicans.)
The White House, in turn, blamed Democrats for not submitting names of potential nominees they could live with. Earlier this month, CNBC claimed the White House had vetted some CFTC candidates but was unlikely to nominate any if CLARITY failed to advance. And here we are.
It’s unclear whether the SEC’s FAQ gaffe might be related to these staffing shortfalls, but it’s hardly reassuring that the number of eyes watching over crypto rulemaking is shrinking as regulators seek to bring more aspects of the traditional financial world ever into crypto’s orbit. Chief among these was the ‘innovation exemption’ for tokenized versions of publicly traded shares that the SEC announced this month. For the market’s sake, it’s time to put bums in seats.
SEC enforcement wars drag on
September 30 marks the end of the SEC’s fiscal year, after which it will tally up the number of regulatory enforcement cases it’s pursued over the past 12 months, its first full year under Atkins’ leadership.
Atkins has taken a significantly more laissez-faire approach than his predecessor, Gary Gensler, dropping multiple crypto-related enforcement actions that carried over from Gensler’s tenure.
As August drew to a close, the SEC announced 38 separate civil complaints against entities that had falsely claimed to be SEC-registered advisory firms. These individual filings were immediately slammed by former SEC enforcement director John Reed Stark as an attempt to ‘pad the stats’ that were otherwise shaping up to be “the worst enforcement numbers in SEC history.”
Earlier this month, Stark updated his tally of the SEC’s recent activity, noting that over the first 18 days of September, “33 of the SEC’s 51 new proceedings were Section 12(j) delinquent-filer cases … That is the entire case. No fraud. No victims. No penalty. No disgorgement … These cases can be ‘investigated’ after breakfast and filed as an in-house SEC administrative proceeding before lunch.”
The SEC’s current director of its Division of Enforcement is David Woodcock, who gave a speech on September 18 in which he noted that “some outside observers keep a close watch on certain numbers associated with our enforcement program, for example the number of cases the Commission files.”
Woodcock appeared to acknowledge Stark’s criticism by claiming that “raw case counts and the total dollar value of remedies obtained tell us little about the quality or nature of our enforcement recommendations.” Woodcock claimed applying these metrics to the SEC’s FY26 is “particularly fraught” given that the current regime “has different enforcement priorities” than the Gensler regime.
Woodcock said his focus is on “administering an enforcement program that is strong and visible in the marketplace … The market must see—and feel—that Enforcement is on the job and market participants need to understand that if they violate the securities laws, they will suffer the consequences.”
Stark responded to Woodcock’s speech, saying “these preemptive apology speeches are a huge tell … [Woodcock’s] Division has spent September cranking out dozens of fill-in-the-blank orders against companies that simply stopped filing their reports, padding the very number he says ‘tell us little.’” Stark didn’t mask his disdain, accusing Woodcock of “managing expectations instead of fraud.”
As luck would have it, the SEC filed two crypto-related fraud complaints on September 29: the first against Cryptoaiml Ltd. and Cryptoaiml Capital Foundation, and the second against TSAI Pro Ltd. and TSAI Capital Foundation. The companies are accused of fraudulently misrepresenting themselves as SEC-registered while “misappropriating” a combined $15.3 million from investors who were promised outsized returns for trading crypto assets on fake trading platforms. The illicit activity in both cases appears to have halted in March 2025.
FAQs:
What did the SEC change about crypto token buybacks?
The SEC clarified that its buyback guidance applies when a crypto system is functional and has no central party. The clarification followed concerns that the original wording could create a broad securities-law loophole.
Why is Hester Peirce leaving the SEC?
Hester Peirce announced that October 2 will be her final day as an SEC commissioner after eight years. She said she was confident in leaving the agency under Chairman Paul Atkins and Commissioner Mark Uyeda.
How many SEC and CFTC seats are vacant?
Peirce’s departure will leave three SEC commissioner seats vacant if President Donald Trump does not appoint replacements. The CFTC has also been operating with only one commissioner, leaving several seats across the two agencies unfilled.
What did the SEC say about its 2026 enforcement numbers?
SEC Enforcement Director David Woodcock said raw case counts and monetary remedies provide limited insight into enforcement quality because the agency has different priorities under its current leadership.
What crypto fraud cases did the SEC file in September 2026?
On September 29, the SEC filed two crypto-related fraud complaints against Cryptoaiml Ltd. and Cryptoaiml Capital Foundation, and TSAI Pro Ltd. and TSAI Capital Foundation. The companies allegedly misrepresented themselves as SEC-registered and misappropriated a combined $15.3 million from investors, promising outsized returns through fake crypto trading platforms.
Does the SEC crypto FAQ have legal force?
No. The SEC says the FAQ reflects the views of Division of Corporation Finance staff and is not a rule, regulation, or official Commission statement. It therefore has no legal force or effect.
What is the SEC?
The U.S. Securities and Exchange Commission (SEC) is the federal agency responsible for overseeing securities markets, including stocks, exchanges, and investment contracts. It also enforces federal securities laws and regulates certain digital assets and crypto-related transactions.
What is the CFTC?
The Commodity Futures Trading Commission (CFTC) regulates U.S. derivatives markets, including futures, options, and swaps. Its jurisdiction can overlap with the SEC’s in digital assets when a token or transaction involves characteristics that fall under both commodities and securities laws.
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