The US Securities and Exchange Commission has indicated that it will not pursue enforcement actions against tokens linked to blockchain-based Decentralized Physical Infrastructure Networks (DePIN).
In a no-action letter released on Monday, SEC Division of Corporation Finance chief counsel Michael Seaman stated he “will not recommend enforcement action” regarding the token launch of the DePIN project DoubleZero.
SEC Commissioner Hester Peirce later remarked that the “economic reality of DePIN projects is fundamentally different from the capital-raising transactions that Congress tasked this Commission with regulating.”
This unusual no-action letter from the SEC illustrates the agency’s latest effort in easing its crypto enforcement stance during the Trump administration, which aims to attract businesses and projects to the US.
DoubleZero’s token is not considered a security
In its communication, DoubleZero indicated that its protocol allows blockchain systems to access “underutilized private fiber links” managed by various contributors. Network participants would be offered the 2Z token for sale.
“This isn’t just a milestone for DoubleZero — it’s evidence that US founders and innovators can collaborate with regulators to achieve clarity and still move rapidly,” stated Austin Federa, the co-founder of DoubleZero and former strategy lead for the Solana Foundation.
DoubleZero’s general counsel Mari Tomunen remarked that the SEC’s no-action letter “highlights that there is a viable path to launch a token. When a token’s value derives from the efforts of other network participants, the Howey test simply does not apply.”
SEC will not “regulate all economic activity”
SEC’s Peirce stated that the no-action letter “provides a chance to reflect on how we, as regulators, can promote innovation without extending our authority beyond what Congress provided.”
“Congress established the SEC to monitor the securities markets, not to regulate all economic activity.”
She further mentioned that the agency’s stance enables crypto infrastructure providers to “focus on building infrastructure, rather than getting bogged down in the complexities of securities laws.”
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Regulating DePIN tokens would hinder market growth
Peirce clarified that DePIN tokens “serve as functional incentives to encourage infrastructure development” and do not represent shares in a company, nor guarantee profits from the contributions of others that would classify them under securities laws.
“These projects distribute tokens as compensation for work completed or services provided, not as investments with an expectation of profits derived from the entrepreneurial or managerial efforts of others,” she explained.
“Classifying such tokens as securities would stifle the expansion of networks comprised of distributed service providers.”
Peirce emphasized that blockchain technology cannot realize its full potential if regulators “force all activities into existing financial market regulatory frameworks.”
DePIN tokens seemed unresponsive to the SEC’s decision, with CoinGecko reporting that tokens in this market segment dropped by 2% over the past day.
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