SEC says crypto governance voting alone does not make token holders a controlling group

It is possible for token holders to vote on a crypto network without being in control of it. According to an update to its crypto-assets FAQs on November 2 , the SEC’s Division of Corporation Finance stated that voting by itself does not classify individuals as controlling group members. The important question is who truly is in control of the network. A control test, not a token-distribution test Question 1.4 of the SEC’s November 2 crypto-asset FAQ update explains when governance voters could collectively qualify as a “central party.” Unaffiliated individuals who vote independently generally are not considered a ‘group of persons or entities’ when determining whether a network has a “central party.” However, if they coordinate outside the governance process, the SEC staff may consider them a group.

BeCrypto News shows a short excerpt and links to the publisher. The full report belongs to Cryptopolitan.