The US Securities and Exchange Commission (SEC) issued a No-action letter to Fuse, a Solana-based Decentralized Physical Infrastructure Network (DePIN) project, effectively suggesting that Business model It does not violate SEC rules, is not considered a security, and therefore does not require registration with the SEC.
DePIN projects are used Blockchain technology To manage physical infrastructure assets, such as energy providers. Built by some of Revolut’s early employees, Alan Chang and Charles Orr, Fuse works by turning distributed energy infrastructure, such as rooftop solar panels, into a decentralized “grid” that can be managed via blockchain, giving operators “tokens” based on the energy contributed. Tokens can be redeemed for “Fuse Goods and Services,” such as rebates and discounts on infrastructure installation or even energy bills.
This allows for a range of use cases, e.g Motivate users To use less electricity during peak periods.
It was Fuse written to the SEC on November 19, seeking confirmation that under the proposed business model, the SEC would not take any enforcement action against the venture. The primary concern was that tokens issued as part of the project might have been taken into account stock Under SEC rules, which would impose a host of additional obligations on the project. As such, much of the information Fuse filed with the SEC relates to The utility of symbolsExplaining that they will not be issued as speculative vehicles, but rather for specific purposes.
“By ensuring that the token retains real-world applicability, Fuse strengthens an ecosystem where the value of tokens is derived from their consumer use rather than speculative investment. As more consumers join the Fuse network and provide more [distributed energy resources]The network system becomes more distributed and provides new outlets for coordinated action to meet the needs of the network.
“In return, consumers benefit directly from lower electricity prices and usage, as well as through the incentives provided by the tokens.”
On Monday, less than a week after Fuse submitted its application to the SEC, the regulator issued a “no action” letter, essentially confirming that the system Fuse described would not run afoul of SEC rules.
“Based on the facts presented, the Department will not recommend enforcement action to the Commission if, based on your opinion as counsel, Fuse offers and sells tokens in the manner and under the circumstances described in your letter without registration under Section 5 of the Securities Act and does not register the tokens as a class of securities under Section 12(g) of the Exchange Act,” read the following: letter.
The important caveat in the letter is that the Fuse system must operate precisely as it was described to the SEC. If the Fuse network and tokens work differently in practice, the message will have no effect.
However, the SEC’s response will be treated as another green light for DePIN projects that operate similarly to Fuse.
In September, the SEC issued its first no-action letter on the DePIN project, giving the green light to Double Zero, which proposed creating a decentralized fiber network. On the day the no-action letter was issued, SEC Commissioner Hester Peirce He wrote gushing self-congratulations letter On how the SEC can “foster innovation without expanding our reach beyond what Congress has mandated.”
Regarding DePIN projects, Pierce said:
“DePIN represents a new way of organizing human behavior and capital resources. Instead of relying on centralized institutional structures to coordinate activity, DePIN projects recruit participants to provide real-world capabilities, such as storage, communications bandwidth, mapping, or energy, through open, distributed peer-to-peer networks. To encourage participation, many of these projects distribute tokens tied to the activity. The person who runs a node, provides storage, or shares the bandwidth earns a reward. These tokens are not shares of stock in the company, nor are promises of profits From administrative efforts to others, they are functional incentives designed to encourage infrastructure construction.
In other words, the SEC appears to have embraced DePIN with open arms.
Watch: Teranode is the digital backbone of Bitcoin
title=”YouTube Video Player” Frameborder=”0″ allowed=”accelerometer; autoplay; write to clipboard; encrypted media; gyroscope; picture-in-picture; web sharing” Referrerpolicy=”strict origin at cross-origin” allowed fullscreen=””>
