SEC Says DePIN Tokens Are Totally Not Its Problem 🤷‍♂️

by

The US Securities and Exchange Commission, that ever-vigilant guardian of financial order, has decided it’s too busy to bother with tokens tied to blockchain-based Decentralized Physical Infrastructure Networks (DePIN). Because why regulate something when you can just… not? 🤡

In a rare no-action letter on Monday, SEC Division of Corporation Finance chief counsel Michael Seaman-who sounds like he might moonlight as a yacht salesman-said he “will not recommend enforcement action” for the DoubleZero project’s token launch. Translation: “You do you, buddy.”

SEC Commissioner Hester Peirce, who seems to enjoy reminding everyone that the SEC isn’t actually the boss of *everything*, chimed in with her own take: “The economic reality of DePIN projects differs fundamentally from the capital-raising transactions Congress charged this Commission with regulating.” So, basically, “Not our circus, not our monkeys.” 🎪🐒

This letter is the latest example of the SEC’s crypto enforcement rollback under the Trump administration, which has promised regulatory easing to attract companies and projects to the US. Because nothing screams “innovation” like fewer rules. 🚀

DoubleZero’s Token: Not a Security, Just Vibes ✨

Seaman said the programmatic transfers detailed by DoubleZero don’t require registration under US securities laws, and its planned 2Z token “is not registered as a class of equity securities.” So, it’s not a security-it’s more like a digital participation trophy. 🏆

DoubleZero’s protocol lets blockchain systems access “underutilized private fiber links,” which sounds like the technological equivalent of digging through your neighbor’s trash for treasures. Network participants would be offered and sold the 2Z token, presumably while being told, “Trust us, this is totally legit.”

“This is more than a milestone for DoubleZero-it’s proof that US founders and innovators can work with regulators to achieve clarity, and still move fast,” said Austin Federa, co-founder of DoubleZero and former strategy lead for the Solana Foundation. Translation: “We convinced the SEC to look the other way. High five!” 🙌

DePIN tokens, because why not?

DoubleZero general counsel Mari Tomunen said the SEC’s no-action letter “underscores that there is a path to launch a token.” Because when the value of the token comes from other network participants’ work, the SEC’s Howey Test-which determines what counts as a security-just throws up its hands and says, “Eh, close enough.” 🤷‍♀️

SEC Won’t “Regulate All Economic Activity” (Just Most of It) 🛑

Peirce said the letter “offers an opportunity to reflect on how we, as regulators, can foster innovation without expanding our reach beyond what Congress has mandated.” Translation: “We’re trying not to micromanage every single thing, but it’s really hard.”

“Congress created the Securities and Exchange Commission to oversee the securities markets, not to regulate all economic activity.”

Peirce added that the agency’s position allows crypto infrastructure providers to “spend their time deep in the weeds of building out infrastructure, not knee-deep in parsing the nuances of securities laws.” Because nothing says “cutting-edge innovation” like arguing over legal jargon for hours on end. ⚖️

Policing DePIN Tokens Would Suppress Market 🌱

Peirce pointed out that DePIN tokens “are functional incentives designed to encourage infrastructure buildout” and are not shares in a company, nor promise profits from the effort of others. Translation: “They’re not securities-they’re just really fancy gift cards.” 💳

“Treating such tokens as securities would suppress the growth of networks of distributed providers of services.”

Peirce concluded that blockchain technology can’t reach its full potential if regulators “force all activities into existing financial market regulatory frameworks.” Because who needs frameworks when you have chaos? 🌪️

DePIN tokens seemingly didn’t react to the SEC’s decision, with CoinGecko showing tokens tied to the market segment lost 2% in the past day. So, while the SEC’s laissez-faire approach might be great for innovation, it’s apparently not doing much for token prices. 📉

Read More

2025-09-30 04:56