The staff of the U.S. Securities and Exchange Commission (SEC) published an update to its crypto-assets FAQ on November 2, addressing a question that has hung over governance tokens for years: does handing voting rights to thousands of investors turn a token into a security?

According to the staff's answer, in general it does not. The update indicates that governance tokens — tokens whose core attribute is voting power over a protocol, such as Uniswap's UNI — are generally not securities.

Why the question matters

Governance tokens give holders a say in protocol decisions, such as software upgrades, fee parameters, or the use of a project's treasury, without conferring a direct claim on profits. Whether voting rights alone could bring a token within the scope of U.S. securities law has been a persistent source of uncertainty for decentralized projects, their developers, and the trading platforms that list the tokens, since how an asset is classified shapes the compliance questions those projects and platforms face. U.S. securities analysis has traditionally centered on the Howey test, which asks whether an asset involves an investment of money in a common enterprise with a reasonable expectation of profits derived from the efforts of others. As staff guidance, an FAQ response reflects the staff's current view rather than a rule adopted by the full Commission or a court ruling, so the analysis of any individual token has typically continued to turn on its specific characteristics and facts.

UNI and Uniswap

UNI is the governance token of Uniswap, one of the most widely used decentralized trading protocols in the DeFi sector. The token was launched in September 2020, and UNI holders can vote on governance proposals that shape the protocol's development. The SEC's treatment of Uniswap drew broad attention in 2024, when Uniswap Labs disclosed that it had received a Wells notice — a signal that SEC staff intend to recommend enforcement action — from the agency. In early 2025, the SEC closed its investigation into Uniswap Labs without pursuing enforcement action.

The November 2 FAQ update now provides staff-level guidance directly on this long-running question, stating the SEC staff's general view on governance tokens such as UNI. Coming after the Uniswap inquiry was closed, the update gives projects, developers, and trading platforms a documented staff-level reference point when assessing governance token structures. How that staff view is carried into future Commission actions or case-specific analyses remains to be seen.

This content was first published on COINOTAG: https://en.coinotag.com/sec-staff-faq-november-2-governance-tokens-uniswap-uni-not-securities