SEC FAQ Clarifies When Token-Holder Governance May Count as Central Control

The SEC has updated its crypto token classification FAQ to address when governance spread across a broad group of token holders may still count as central control, a distinction that bears on how crypto assets are classified. The update concerns the relationship between holder participation and control. It addresses whether decision-making that involves many token holders may still count as centralized for classification purposes. Broad governance and decentralization are related, but the FAQ’s focus is whether broad participation may still fall within a central-control analysis.