SEC Staff Add Three Questions to Crypto-Assets FAQ on Governance and Control

The Securities and Exchange Commission’s Division of Corporation Finance staff added three questions to its crypto-assets FAQ Nov. 2, clarifying how governance and access controls factor into the Division staff’s digital-commodity analysis. The update covers whether participants in broad-based governance form a group, what authority amounts to oversight of participation, and how functionality differs from decentralization. For the group question, staff frame the test as a facts-and-circumstances determination. Staff generally treat governance participants as acting separately when they have no ties to one another and have made no formal or informal arrangement—including delegation—to coordinate their actions. Staff apply that approach to governance run through an organization, association or foundation when native-asset ownership determines who can take part.

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