SEC FAQ gives XRP formal digital commodity status, narrows platform liability

The United States Securities and Exchange Commission (SEC) Division of Corporation Finance has taken a significant step in clarifying the regulatory landscape for crypto assets in 2026. On September 25, the division released an extensive FAQ page outlining the treatment of various digital assets under federal securities law. This latest move follows months of mounting demand for regulatory clarity within the crypto industry.

Key clarifications for digital assets

The September FAQ addresses several issues that had remained ambiguous following the agency’s landmark March Interpretive Release. Specifically, it provides guidance on the classification of staking products. According to the SEC, a Staking Receipt Token distributed by a protocol-based Liquid Staking Provider qualifies as a digital commodity if its value depends on the operational performance of a live crypto system and prevailing supply and demand in the market.

Further, the SEC confirmed that once a blockchain network is considered functional, ongoing work to maintain, secure, or upgrade it no longer counts as an essential managerial effort judged under the Howey test criteria. This distinction has marked implications for XRP, potentially shielding it and similar assets from regulatory action previously faced under securities laws.

Mini dictionary: Howey test, a standard from US Supreme Court case SEC v. Howey Co. (1946), is used to determine whether certain transactions qualify as “investment contracts” and are thus subject to securities regulations.

Once a crypto network is operational, activities to maintain or upgrade it are not considered essential managerial efforts under regulatory standards, removing a key challenge the SEC had previously used in enforcement actions against assets such as XRP.

XRP’s official classification and background

XRP, a digital asset developed by Ripple Labs to facilitate real-time cross-border payments, has long faced regulatory scrutiny from the SEC. In March 2026, an Interpretive Release jointly issued by the SEC and the Commodity Futures Trading Commission (CFTC) explicitly named XRP as a digital commodity. The document detailed that, based on features and functions as of the release date, XRP meets the criteria for this classification.

The new FAQ strengthens this status by reinforcing that the agency’s framework, which now prominently lists XRP as a digital commodity, remains in effect and shapes regulatory enforcement. Levi Rietveld, creator of Crypto Crusaders and a prominent commentator in the crypto space, described the update as “a big regulatory boost” for XRP and noted that the SEC’s framework now carries formal authority, although it does not carry the weight of statutory law.

Rietveld highlighted that the SEC’s explicit mention of XRP within its regulatory framework gives institutions greater certainty about its classification, setting the stage for broader participation.

Impact on institutional participants

The clarified regulatory position is expected to influence institutional attitudes toward XRP. Rietveld argued that organizations seeking assurance about XRP’s regulatory status can move ahead with greater confidence following the SEC’s latest guidance. This reduction in legal uncertainty for platforms listing XRP significantly lowers the perceived risk and compliance barriers for institutions.

However, the agency acknowledged that its FAQ is advisory in nature. It states that the document “has no legal force or effect, do[es] not alter or amend applicable law, and do[es] not create any new or additional obligations for any person.” At the same time, the SEC underlined its commitment to building a comprehensive regulatory architecture, referencing the Interpretive Release, previous innovation exemptions, and the FAQ as forming its most defined stance to date.

Separately, the proposed CLARITY Act failed to pass the Senate, receiving 49 votes in favor and 50 against, with no support from Democratic senators. The Act had aimed to formalize crypto classifications, but the SEC’s guidance now represents the prevailing regulatory approach in absence of new legislation.