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SEC staff clarifies when live tokens, buybacks, and staking receipts are not securities, boosting PUMP token which rebounded 18% with $24 million inflows and ongoing buybacks.
The U.S. Securities and Exchange Commission (SEC) staff has clarified when live tokens, buybacks, and staking receipts are not considered securities, providing a major boost for tokens with protocol revenue and buyback mechanisms. The clarification, announced recently, uses the classic Howey test to determine when crypto assets and token sales constitute securities under federal law, focusing on economic reality rather than terminology. Following the news, the PUMP token recorded a significant upswing, rebounding from a slip to $0.0038, reclaiming and flipping $0.004, and rallying to a daily high of $0.0046. At the time of writing, it was trading at around $0.0045, up 18% on the daily charts, with spot trading volume surging 57%.
SEC Clarification and Howey Test
The SEC's clarification emphasizes that the classification of crypto assets as securities primarily depends on economic reality rather than terminology. The agency uses the Howey test, a longstanding legal framework, to assess whether an asset qualifies as an investment contract. This move is seen as a major boost for tokens that generate protocol revenue and engage in buybacks, as it provides clearer regulatory guidance. The SEC's stance could encourage more projects to adopt similar models, knowing that live tokens, buybacks, and staking receipts may not be deemed securities under federal law.
PUMP Token Price Surge and Market Activity
Thanks to the SEC's clarification, PUMP recorded a major upswing. The altcoin rebounded from its $0.0038 slip, reclaimed and flipped $0.004, and rallied to a daily high of $0.0046. At the time of writing, it was trading at around $0.0045, up 18% on the daily charts. The price hike was followed by a 57% surge in spot trading volume. With investors incentivized by recent positive developments, PUMP's network saw fresh capital flows. According to DefiLlama, the protocol's USD Inflows rose to $24 million, marking a notable reversal after dropping for four consecutive days and hitting the negative zone just over 24 hours ago.
Buybacks and Supply Reduction
Elsewhere, the project has continued with its buybacks. After generating $3.2 million in revenue, PUMP spent $1.6 million buying 398 million tokens. So far, the team has bought and burned $463.79 million worth of PUMP, or 16.79% of supply removed from circulation. While buybacks continue to reduce available supply, sellers have continued to cash out even marginal gains. On 26th September, for example, spot sell volume rose to 2.68 billion while the buy volume fell to 2.54 billion. As a result, the buy-sell delta dropped to -144.5 million, a clear sign of aggressive spot selling. The same market behavior was observed on exchanges. The Spot Netflow has remained positive for three consecutive days, having jumped to $1.49 million after PUMP rebounded from its recent slip.
Technical Indicators and Future Outlook
At the time of writing, PUMP's upside momentum seemed to be strong. The Trend Strength Index (TSI) formed a bullish crossover and rose to 6.8. Likewise, the Aroon OSC has held at around 42 for two consecutive days, reflecting stabilizing upside momentum. Combined, these two indicators could allude to the likelihood of the trend's continuation. Therefore, if the favorable conditions hold, the altcoin is likely to reclaim $0.0048 and target a flip of $0.005. However, with profit takers actively engaged, the selling pressure could derail the uptrend and PUMP revisit $0.0038.
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