Rare No-Action Letter Signals Softer Stance on Crypto Infrastructure
In a significant policy shift, the U.S. Securities and Exchange Commission (SEC) has confirmed that Decentralized Physical Infrastructure Network (DePIN) tokens fall “fundamentally outside” its jurisdiction. The decision came through a rare no-action letter regarding the planned launch of the 2Z token by blockchain project DoubleZero.
Austin Federa, co-founder of DoubleZero, called the move “proof that U.S. innovators can work with regulators to achieve clarity and still move fast.” The project’s legal team echoed that sentiment, with general counsel Mari Tomunen stating: “When the value of the token comes from other network participants’ work, Howey simply does not apply.”
Why the SEC Stepped Back
Michael Seaman, chief counsel of the SEC’s Division of Corporation Finance, stated that he “will not recommend enforcement action” against DoubleZero. The agency concluded that the token’s design, which rewards contributors for providing underutilized fiber network access, does not meet the legal definition of a security.
Importantly, Seaman emphasized that the 2Z token is not registered as equity, nor does it involve fundraising that would require securities oversight.
“Not Regulating All Economic Activity”
SEC Commissioner Hester Peirce added context to the decision, stressing that the economic model behind DePIN tokens differs from traditional securities. “Congress created the Securities and Exchange Commission to oversee the securities markets, not to regulate all economic activity,” she said.
Peirce explained that DePIN tokens function as incentives, rewarding participants for infrastructure buildout rather than offering ownership stakes or profit expectations. “Treating such tokens as securities would suppress the growth of networks of distributed providers of services,” she noted.
DoubleZero Applauds Regulatory Clarity
The 2Z token will serve as compensation for contributors who provide bandwidth through private fiber links, helping blockchain systems scale without centralized infrastructure.
Despite the regulatory milestone, DePIN-related tokens showed little immediate market impact. According to CoinGecko data, the sector fell around 2% in the past 24 hours. Analysts suggest the muted response reflects broader market conditions rather than the significance of the SEC’s position.
The SEC’s stance could set a precedent for other infrastructure-focused crypto projects. By clarifying that tokens designed for utility and contribution-based rewards are not securities, regulators may open the door to greater innovation in decentralized infrastructure.
For the DePIN sector, the no-action letter represents not just regulatory relief, but a green light for further development.
Disclaimer
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