gm from the Day One Law team!

Today’s legal update includes:

📓 Updates from the SEC
💰️ Token buybacks: What you should know
🗺️ Latest on market structure legislation

SEC Chair: Most tokens not securities

In a major policy speech, SEC Chair Paul Atkins detailed the core principles of the agency’s “Project Crypto,” noting that they will continue to take a substance over form approach when evaluating crypto assets. Chair Atkins gave his opinion on various types of digital assets:

1. “Digital commodities,” or “network tokens,” are not securities.

2. “Digital collectibles” are not securities.

3. “Digital tools” are not securities.

4. “Tokenized securities” are and will remain securities.

Chair Atkins shared the Commission’s plans to create a clear taxonomy for the various classes of digital assets, so market participants can understand which group they fall into. He also said that “most crypto tokens trading today are not themselves securities.”

This is far from a blanket exemption, however, as he added that “crypto assets accompanied by certain representations or promises to undertake essential managerial efforts that satisfy the Howey test” can be part of, or subject to, investment contracts, if the representations or promises are “explicit and unambiguous as to the essential managerial efforts to be undertaken by the issuer.”

You should know: While any token taxonomy will be helpful, teams must remain mindful of forward-looking statements about their efforts and token value. Chair Atkin’s remarks suggest that the Commission will continue a form over substance approach when evaluating tokens, and public communications, disclosures and token design remain crucial elements of any regulatory strategy.

Buybacks growing in popularity

We’re seeing a growing trend of leading DeFi protocols adopting token buybacks and burns to recycle revenue, manage supply, and signal bullishness.

A few examples:

• Uniswap: Proposal to create a system that channels protocol fees toward burning UNI, as well as a proposal to retroactively burn 100 million UNI from their treasury. (Details)

• AAVE: Proposal to devote $50 million annually toward token repurchases, a program in place since March of this year. (Details)

• Lido: Proposal to create an automated buyback mechanism to repurchase a maximum of $10 million LDO per year. (Details)

• dYdX: Proposal to increase the allocation of protocol fees used for monthly buybacks from the current 25 percent to 75 percent. (Details)

These proposals came after CoinGecko’s mid-October token buyback report found Hyperliquid spent over $600 million in token buybacks in 2025, adding that “28 notable projects” were also allocating meaningful spend toward token buybacks in 2025.”

You should know: As token buybacks and burns become mainstream, it’s important to be mindful of the regulatory risks accompanying them. Projects should understand and align on why they are conducting any repurchase or burn program, and public communications must be aligned to avoid inconsistencies. We recommend consulting an attorney before taking any steps to create a similar program.

Latest on market structure

It’s been months since comprehensive crypto legislation was first proposed, but we’re still (slowly) trending in the right direction.

On November 10, a bipartisan discussion draft was shared by Senate Agriculture Committee Chair John Boozman (R-AR) and Senator Cory Booker (D-NJ). The draft expands on the CLARITY Act, market structure legislation passed by the House of Representatives in July. ey elements are as follows:

• The CFTC gets significant authority over digital commodities, along with additional funding to support its expanded role. There are also requirements for the CFTC and SEC to coordinate and collaborate on necessary inter-agency rulemakings;
  

• “Digital commodity” is defined as “any fungible digital asset that can be exclusively possessed and transferred, person to person, without necessary reliance on an intermediary, and is recorded on a cryptographically secured public distributed ledger.” The definition also lists exclusions, such as any tokens that are stablecoins, securities or derivatives, among others. See page 18 for a comprehensive list; and
  

• Self-custody is protected. The draft enshrines rights to “maintain a hardware or software wallet for the purpose of facilitating the person’s own lawful custody of digital assets” and to “engage in direct, peer-to-peer, lawful transactions in digital assets.”

The draft left many open questions, suggesting that lawmakers are still not comfortable with areas like DeFi and AML. Crypto in America reported that the goals for Senate staffers are to have bills ready for markups in early December. We’ll keep you updated.

You should know: This update is directional, meaning Congress is clearly moving toward a market structure framework, but timing remains uncertain. Key elements of the various draft bills are still unsettled among both crypto industry players and government factions, which makes it increasingly likely that any comprehensive market structure legislation slips to 2026 or later. We’re monitoring how drafters address open issues such as DeFi, AML expectations, and the division of authority between the SEC and CFTC.

That’s it from us.

As always, please reach out if you have questions or just want to riff on what we’re seeing in the market, or the implications of any of the above.

Talk soon.

Nick Pullman
Day One Law