The SEC issued a no-action letter to DoubleZero, confirming that automated transfers of its 2Z token will not be treated as securities transactions.
The letter, dated September 29, represents the SEC’s first public acknowledgment that tokens linked to blockchain-based decentralized physical infrastructure (DePIN) networks can be distributed without triggering securities registration requirements.
In the response signed by Michael B. Seaman, chief counsel for the Division of Corporate Finance, the SEC stated that it would not recommend enforcement action if DoubleZero made 2Z transfers under the framework described by corporate counsel.
Notably, the agency also said that 2Zs do not need to register as a class of securities under Section 12(g) of the Exchange Act.
Chairman of the SEC as well subscriber His point, noting that the agency is not expanding its reach to cover all digital assets but is focusing on tokens that clearly fall under securities laws.
The SEC’s no-action letter to DoubleZero marks a pivotal moment for token regulation in the US; However, it is based strictly on a company’s specific disclosures, with the agency cautioning that different facts may lead to different results.
For DoubleZero, the verdict Validation Its four-month engagement with the regulator offers the green light for shareholders and users to participate in the network without fear of securities violations.
The design of the token, used for value transfer, incentives, and network security rather than stock-like ownership, was central to the SEC’s position.
Shortly after the announcement, Commissioner Hester Peirce also issued a statement clarifying that the DoubleZero model fits into the category of decentralized physical infrastructure networks, or DePIN.
She emphasized that these projects differ from traditional fundraising because tokens are distributed as compensation for providing services such as bandwidth, storage, or energy, and not as investments seeking to profit from the efforts of others.
According to Pierce, the economic reality of DePIN projects does not meet the criteria of the Howey test, which defines securities under US law. treatment She warned that these tokens as securities would stifle the growth of the networks Which depend on distributed service providers.
Pearce added that blockchain technology should not be forced into frameworks designed for financial markets, stressing that markets, not regulators, should determine the success of infrastructure-based projects.
