The U.S. Securities and Exchange Commission's Division of Corporation Finance updated its crypto asset frequently asked questions on Nov. 2, adding three new answers addressing governance structures and centralized entity classification. The SEC stated that participants in a broad governance system of a functional crypto network—provided they are unaffiliated with one another and have no agreement or understanding to act in concert—generally would not be considered "centralized entities." This conclusion also applies where the governance system belongs to an organization, association, or foundation. The updated FAQ further defined "supervisory participation" by a centralized entity as having authority to control access to the crypto system at the protocol, validator, or user level, such as unilaterally granting or restricting access, or deciding or changing voting processes for software upgrades. The SEC clarified that "functional" and "decentralized" are distinct concepts. These FAQs represent only the views of SEC staff and carry no legal force.