Extensive governance participants typically do not constitute a centralized entity, SEC adds new crypto asset FAQ

Odaily reports: The U.S. Securities and Exchange Commission (SEC) Division of Corporation Finance updated its crypto asset FAQ on November 2, adding three new answers related to the classification of crypto assets. The FAQ states that participants in the broad governance system of a functional crypto system, if they are not affiliated with one another and there is no agreement, arrangement, or understanding to act in concert, typically do not constitute a "centralized entity"; the conclusion is the same when the governance system is affiliated with an organization, association, or foundation. The FAQ also notes that "supervisory participation" by a "centralized entity" refers to its authority to control access to the crypto system at the protocol, validator, or user level, including unilateral admission or restriction of access, and deciding or changing the voting process for software upgrades; "functional" and "decentralized" are two distinct concepts. The above FAQ represents only the views of SEC staff and does not have the force of law.