Morning Minute is a daily newsletter authored by Tyler Warner. The views expressed are his own and do not necessarily represent those of Decrypt. Also, check out our daily news show 'FOMO HOUR' for the latest stories and market updates.

Good morning!

Here are the main headlines today:

  • Major cryptocurrencies experienced a decline overnight, with Bitcoin down 2% at $83,000.
  • The SEC has revised its FAQ section, permitting token buybacks within crypto protocols.
  • Citi has teamed up with Coinbase to provide stablecoin services for institutional clients.
  • Bitcoin ETFs recorded a remarkable $2.39 billion in inflows over the past week, marking seven consecutive days of gains.
  • Pump has outperformed Hyperliquid in revenue this week, with PUMP rising by 11%.
BitcoinBTC · USD$83,479−2.33%24H7D1M1YYTDSep 21Sep 23Sep 25Sep 26Sep 28$87.2k$85.7k$84.2k$82.7k24h HighHigh$85,08924h LowLow$82,581VolVol$1.4BMarket projectionsOdds by MyriadToday$82,000 to $84,000$82k–$84k71% chanceThis weekBelow $84,000Below $84k55% chanceThis month$82,000 to $84,000$82k–$84k71% chance→Buy Bitcoin with USDTPowered by Jupiter$50$100$500BuyPrice data by CoinGeckoCoinGeckoMore Bitcoin news and projections →

⚖️ SEC Approves Token Buybacks for Cryptocurrency Networks

The SEC’s Division of Corporation Finance updated its FAQ on Friday, delivering a pivotal statement for the year. The agency indicated that once a cryptocurrency network becomes operational, the announcement of a token buyback does not imply a commitment to "essential managerial efforts."

The Howey test determines whether an investment is considered a security based on the expectation of profit from the efforts of others. The SEC clarified that announcing a buyback does not constitute such a promise, which is significant for protocols that have faced uncertainty since the previous administration’s crackdown on cryptocurrencies.

Furthermore, the SEC stated that maintaining, upgrading, or expanding a functional network does not meet the Howey criteria. Vague statements of future aspirations also do not qualify as promises of profit. Gabriel Shapiro, a securities lawyer at MetaLeX Labs and former general counsel at Delphi Labs, remarked that the buyback guidance “exceeds my expectations” and suggested that securities regulations are becoming more optional as the SEC applies them to the crypto sector.

However, there is a clear distinction: if a network is not yet functional and the issuer promotes a buyback as a means of generating returns for holders, this could still invoke securities laws. Thus, the guidance serves as a filter rather than an all-encompassing exemption. Launch a working product and implement a buyback, and you're in the clear; promise returns before having a product, and you risk regulatory scrutiny.

So, who benefits from this announcement? DefiLlama tracks buyback initiatives at HYPE, PUMP, ENA, AAVE, SKY, LDO, PENDLE, AERO, RAY, JTO, NEAR, ETHFI, SYRUP, LIT, ASTER, KMNO, MET, CC, CARDS, PONS, and STONK, among others, all of which operate live products generating revenue. Hyperliquid channels USDC reserve yield into HYPE buybacks under AQAv2. Pump.fun has burned $451 million, roughly 16.6% of its supply. Pons allocates about 80% of V1 revenue to buybacks. Ethena’s community voted to direct 95% of net revenue to ENA. These initiatives have previously existed in a legal gray area but are now more clearly defined.