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SEC Just Made Regulation Easier For Governance Tokens Like Uniswap
SEC staff say open governance token votes aren't central control. Here is why, and which projects still fail the test.
Dextape brief
The SEC's staff says governance tokens, which allow voting on how a crypto project operates, generally do not become securities just because thousands of investors hold voting power, if the network is genuinely decentralized. In a November 2 update, staff explained how these tokens fit the agency's earlier March crypto framework. Projects must still show voting power is widely spread, since a small group able to change rules or override decisions could indicate central control. The article stresses this does not automatically make UNI or other governance tokens commodities. The community behind Uniswap cast votes to adopt a Wyoming DUNA, a legal form built for decentralized organizations. The guidance is nonbinding, not a new law, and Congress could offer firmer certainty through the CLARITY Act, which stalled in September.
Why it matters: It gives crypto readers clarity on whether decentralized governance tokens could face different regulatory treatment, based on how voting power is distributed.
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Dextape context
Built from Dextape’s own wire, stories and glossary.
Terms in this story
- Governance token
- A token that gives holders votes on a protocol's decisions, such as fees or upgrades.
- Governance
- The process for deciding changes to a protocol and its settings, whether through token-holder votes, a foundation or core developers.
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