SEC expands crypto asset guidance on governance and decentralization

The SEC expanded its crypto asset guidance, clarifying when blockchain governance participants constitute a "central party" and distinguishing between a network being functional versus decentralized — key factors in determining whether a token is a commodity or a security. The additions to the agency's digital-asset FAQ address how governance through an organization or foundation does not automatically make participants a controlling group, and how a fully functional protocol may still be considered centralized if operational or economic control is concentrated. The entries are nonbinding staff guidance rather than statutory rules, and no details on the guidance's full scope were disclosed.