The SEC’s Division of Corporation Finance revised its crypto asset FAQ on September 28, 2026. This latest revision builds upon the initial FAQ released on September 25 and the milestone March Interpretive Release that designated XRP as a digital commodity.
Well-known crypto analyst EGRAG CRYPTO (@egragcrypto) published a detailed breakdown on X, examining the implications of this refreshed guidance for the industry.
While the update does not possess the force of law—a point explicitly noted by SEC staff within the text—the guidance refines the legal framework surrounding crypto classifications in ways that hold considerable importance 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
Functionality Changes the Calculation
EGRAG CRYPTO pointed out a central theme from the FAQ: utility, functionality, and decentralization form the basis of the SEC’s evaluation of digital assets. The updated text details what occurs when a crypto network achieves full functionality. Once that milestone is reached, ongoing efforts to maintain, secure, or upgrade the network no longer qualify as essential managerial efforts under the Howey test.
The Howey test serves as the legal benchmark for identifying whether an asset constitutes a security. Excluding network maintenance from “essential managerial efforts” narrows the pathway toward classifying functional networks as securities.
Operating on a decentralized and functional network, XRP was explicitly designated as a digital commodity in the March Interpretive Release. The September FAQ reinforces this classification by clarifying the conditions that keep a functional network outside the scope of an investment contract.
Promotion and Buybacks Get Clarity
The revised FAQ also covers promotional activities, noting that advertising a crypto system’s existing utility does not inherently function as a promise or representation to perform essential managerial efforts. EGRAG CRYPTO underscored this specific point, explaining that promotion centered on utility carries distinct legal implications compared to marketing tied to profit projections.
Further elaboration is provided regarding buyback programs. If a functional, decentralized crypto system lacks a central governing body and announces a buyback, it does not amount to a promise or representation of essential managerial efforts. The analyst highlighted this as a significant clarification that grants decentralized and functional networks greater operational latitude.
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A Growing Regulatory Architecture
This latest update forms part of an evolving regulatory framework developed by the SEC, tracing back to 2016 guidance. The March Interpretive Release initially established XRP’s status as a commodity, which was subsequently built upon by the September 25 FAQ and further refined by the September 28 update.
EGRAG CRYPTO’s analysis centers on a primary conclusion: decentralization, utility, and functionality constitute the framework used by the SEC for assessments. XRP satisfies all of these requirements under existing guidance, providing institutions evaluating the asset with additional staff-level support for its commodity designation.