The recent decision by the U.S. Securities and Exchange Commission (SEC) to issue a No-Action Letter to DoubleZero regarding their 2Z token has significant implications for the crypto industry in the United States. This letter, dated September 29, marks the first time the SEC has publicly acknowledged that a token tied to blockchain-based Decentralized Physical Infrastructure Networks (DePIN) can be distributed without triggering securities registration requirements.
In the response signed by Michael P. Seaman, chief counsel of the Division of Corporation Finance, the SEC stated that it will not recommend enforcement action if DoubleZero conducts 2Z transfers under the framework described by the company’s counsel. Additionally, the agency clarified that 2Z does not need to be registered as a class of equity securities under Section 12(g) of the Exchange Act.
This decision by the SEC represents a milestone for token regulation in the U.S. and provides clarity for token launches in the country where regulatory uncertainty has long hindered development. DoubleZero’s engagement with the regulator over the past four months has culminated in this positive outcome, validating the company’s efforts and offering a green light for contributors and users to participate in the network without fear of securities violations.
Commissioner Hester Peirce also released a statement supporting the SEC’s decision, highlighting the importance of distinguishing between tokens used for value transfer, incentives, and network security from those used for equity-like ownership. Peirce emphasized that projects like DoubleZero, which fall under the category of DePIN, should not be treated as securities under U.S. law as they do not meet the criteria of the Howey Test.
Overall, the SEC’s No-Action Letter to DoubleZero and Commissioner Peirce’s statement signal a shift in how regulators engage with innovative projects in the crypto industry. By fostering innovation without overstepping statutory mandates, regulators can support the growth of infrastructure-based projects like DePIN networks.
Looking ahead, DoubleZero is set to debut its 2Z token on Binance Alpha and Binance Futures on October 2, with trading commencing at 12:00 AM UTC and 12:30 AM UTC, respectively. This development, coupled with the regulatory approval and exchange listings, marks a significant turning point for Solana’s ecosystem and sets a precedent for future token launches in the U.S.
In conclusion, the SEC’s decision to greenlight the 2Z token with a rare No-Action Letter signifies a step forward in regulating DePIN projects and provides much-needed clarity for the crypto industry in the United States.