# SEC staff adds crypto FAQs on governance groups and network control

Canonical: https://chainminute.com/news/f6815601-4619-402d-b53d-aff08a94c8db
Published: 2026-11-03T01:38:04.369Z
Publisher: Chain Minute

Three November 2 staff answers distinguish governance coordination, authority over participation and functionality from decentralization, without changing the law.

The SEC’s Division of Corporation Finance added three crypto-asset FAQs on November 2, explaining its staff’s views on governance groups, control over network participation, and the difference between functionality and decentralization. The additions are Questions 1.4, 1.5 and 1.6 in the division’s existing FAQ document.

The document expressly says the answers are staff guidance. The Commission has neither approved nor disapproved them, and they carry no legal force, amend no law and create no new obligations.

Question 1.4 addresses whether participants in broad-based governance constitute a group for the framework’s definition of a central party. Staff describe this as a determination based on the circumstances. Participants generally would not be treated as such a group when they are unaffiliated and have no separate agreement or understanding to coordinate, including through delegation, beyond participating in governance itself.

That qualification matters: distributing voting tokens does not, by itself, answer the coordination question. The answer also says that a qualifying group would need operational, economic or voting control to meet the central-party definition. Its scope is limited to the interpretive release’s digital-commodity discussion, rather than other securities-law definitions involving groups.

Question 1.5 focuses on authority over participation. Its examples include unilateral power to restrict access, change voting procedures, decide who validates transactions or modify network code. Staff distinguish that authority from operations performed automatically under code, or discretion exercised only through governance whose participants are not considered a central party.

Question 1.6 separates two concepts: functionality concerns whether the native asset can serve its programmed utility, while decentralization concerns autonomous operation without a controlling person, entity or group. The answer says the degree of decentralization can vary with the circumstances.

For teams describing their networks, the additions make decision-making permissions and coordination arrangements relevant alongside technical utility. They do not classify any particular token or establish that a network with token voting is decentralized.

## Sources

- [Frequently Asked Questions on the Application of the Federal Securities Laws to Certain Types of Crypto Assets and Certain Transactions Involving Crypto Assets](https://www.sec.gov/about/divisions-offices/division-corporation-finance/faqs-crypto-assets) — U.S. Securities and Exchange Commission, Division of Corporation Finance

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