SEC Staff Draws A Line On Token Buybacks and Liquid Staking in New FAQs
Plus, the Fed prices what it costs a bank to issue a stablecoin
gm, Defiers!
These are the biggest stories in DeFi and crypto:
- SEC staff drew a line on token buybacks and liquid staking receipts in new FAQs
- The Fed proposed capital charges and an approval process for bank stablecoin issuers
- Bitget raised its hack estimate to $387.5 million with withdrawals still paused
- Aave opened USDC borrowing against seven Coinbase stock tokens on Base
- Ethena started backing USDe with equity basis trades on Binance
The SEC’s Division of Corporation Finance announced buybacks of non-security tokens on a functional crypto system does not by itself promise essential managerial efforts, the element that turns a token into an investment contract under Howey. A network still short of functional gets a different answer if the issuer pitches the buyback as yield for holders. The same FAQs treat qualifying liquid staking receipts as non-securities, provided the issuer cannot lend, pledge or otherwise use the deposited asset.
None of it binds the Commission. The staff says the published FAQ carries "no legal force or effect," and the Commission has neither approved nor disapproved them.
Read more below!
Synthetic vs. Direct Tokenized Stocks: Who Wins After The SEC Exemption?
Two stock-token models picked up new jobs on Friday: Coinbase's tokens became Aave collateral, and Binance's bStocks started backing USDe. Camila Russo put the question under both to Cooley's Rodrigo Seira, Dinari's Gabriel Otte and Ondo's Peter Curley: should a tokenized stock track the price, or be a claim on the share? Watch the full conversation.
SEC Staff Clarifies Token Buybacks and Liquid Staking in New FAQs
The SEC's Division of Corporation Finance issued FAQs on Sept announced buybacks of non-security tokens on a functional crypto system does not by itself promise essential managerial efforts under the Howie test.
The FAQs also classify a staking receipt as a digital tool, and a protocol-based liquid staking receipt as a digital commodity, when it only evidences ownership of the deposited asset and the issuer cannot transfer, lend or pledge it. Funding development on a functional system stays outside managerial effort too.
Fed Proposes Capital Charges and Bank Approval Rules for Stablecoins
The Federal Reserve proposed rules on Sept. 24 that turn the GENIUS Act into capital math for the stablecoin issuers it supervises. Reserves must equal outstanding coins at all times, held in cash, Fed balances, insured deposits, Treasuries of 93 days or less and qualifying repo. Redemptions would generally settle within two business days. Operational-risk capital stacks a graduated charge on outstanding coins — 2% on the first $20 billion, 1.5% on the next $30 billion, 1% above $50 billion — with 25% of three-year average non-reserve revenue.
Bitget Raises Hack Estimate To $387.5 Million As Token Accounting Widens
Bitget raised its estimate of what attackers took on Sept. 24 to about $387.5 million, up from $351.6 million, after adding Zcash and TRON assets it had left out of the first count; the exchange says the increase comes from the original incident. Explorer records show roughly 102.98 million XRP and 31,890 ETH leaving Bitget-labeled wallets, alongside $34.75 million of USDT, $21.06 million of USDC and about 3,000 XAUt. Arkham traced the ether through Across, Stargate and LayerZero into eight fresh addresses holding about 68,300 ETH. Bitget says the vulnerability is remediated and is offering 5% bounties for freezes and recoveries. CEO Gracy Chen promised an update on withdrawal timing by midnight ET.
Aave Adds Coinbase Stock Tokens as Collateral on Base
Aave opened a dedicated V4 market on Base where eligible non-U.S. holders of seven Coinbase stock tokens can borrow USDC: AAPLc, AMZNc, GOOGLc, METAc, MSFTc, NVDAc and TSLAc. Collateral factors run from 79% for MSFTc down to 65% for METAc and TSLAc, and in V4 that factor is both the borrowing limit and the liquidation threshold. Borrowing is capped at 21 million USDC. The Chainlink feeds update only from Sunday 8 p.m. ET to Friday 8 p.m. ET and hold their last price over weekends while interest keeps accruing, which LlamaRisk warns can produce a sudden repricing when they resume. Morpho opened the same trade against five Coinbase tokens on Sept. 18.
Ethena Starts Equity-Basis Rollout for USDe With Binance
Ethena said it is beginning to allocate USDe backing to equity basis trades through Binance, pairing bStocks tokenized equities with shorts in Binance's USDT-denominated equity perpetuals. It is the hold-and-short trade Ethena already runs in crypto, pointed at stocks. The announcement gives no starting size and no revised collateral breakdown; about 4.91 billion USDe sat on Ethereum when checked Friday. Ethena's accounts qualify for lower auto-deleveraging priority on Binance, which puts them further back in the queue if the exchange has to close profitable positions. Binance's own notice says bStocks are certificates that carry no direct ownership of the shares.
Other Stories Worth Your Time
Circle CFO Jeremy Fox-Geen to Step Down by Year-End — Jeremy Fox-Geen stays until Dec. 31 or until a successor arrives, and his exit terms include $1.05 million paid over 12 months on conditions. Co-founder Sean Neville left the board the same day.
Tether Says EQIBank Exposure Is Below 0.034% of Group Assets — after a report that some of its funds are stuck at the offshore bank, Tether put its exposure below 0.034% of group assets without giving a dollar figure. A federal court order lists $79.1 million seized from EQIBank.
EBA Floats Stablecoin Lending Restrictions for EU Crypto Firms — answering the Commission's MiCA review, the European Banking Authority floated barring EU crypto firms from arranging lending in unauthorized stablecoins, alongside leverage limits and certification for DeFi lending protocols. The consultation closes Sept. 30.
Binance-Owned CoinMarketCap Acquires CoinGlass — Binance's data arm bought the derivatives analytics site that tracks open interest and liquidations across Binance's rivals. CoinGlass says its site, API and pricing stay the same; terms were undisclosed.
KelpDAO Files BC Civil Claim Against LayerZero — Evercrest, the company behind Kelp's app, filed in British Columbia five months after the $292 million rsETH bridge exploit. Bryan Pellegrino says the claim names him too and calls it meritless.
Tokenized-Stock Holder Count Reaches 4.3 Million, Led by BNB Chain — Token Terminal puts wallets holding tokenized stocks at about 4.3 million, up from roughly 100,000 a year earlier, led by BNB Chain at 1.8 million and Robinhood Chain at 1.3 million. The figure counts balances, and one investor can hold several.
AlphaFi Winds Down After Oracle Error, With Sui Foundation Support — an ALPHA oracle misconfiguration left loans undercollateralized and the Sui Foundation covered the bad debt. The lending protocol is in maintenance mode, and Slush told users to exit four strategies built on it.
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