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

On Nov. 2, the SEC’s Division of Corporation Finance updated its crypto-assets FAQs to state that token holders’ governance voting alone does not make them members of a controlling group. Question 1.4 said unaffiliated individuals who vote independently generally are not treated as a group, while coordinated voters outside the governance process may be, but only if they have actual control over the network’s operations, economic decisions, or voting process. The update also said functionality and decentralization are assessed separately. It referenced the SEC’s March 17 interpretive release, which said a functional crypto system has no central party overseeing participation or distributing rewards. The FAQs are staff views and not binding SEC rules.