Bitwise and Hyperliquid Push SEC to Rework Proposed Crypto Token Rules

Bitwise Asset Management and the Hyperliquid Policy Center filed comment letters on Monday asking the SEC to change its proposed Regulation Crypto Assets. The plan would create exemptions for qualifying crypto fundraising and a conditional safe harbor for tokens tied to investment contracts. Both groups want sharper guidance on token classification, airdrops and secondary market trading as the public comment period closes Tuesday.

Bitwise Wants a Standard Managers Can Actually Use

Bitwise said investment managers need a test based on publicly available information to decide whether a crypto asset falls under securities laws. It also asked for clearer rules on when managers can rely on an issuer’s proposed Form TR filing, which would certify that an investment contract has ended, and on how to assess tokens when no such filing exists.

Hyperliquid Calls for a Broader Safe Harbor

The Hyperliquid Policy Center argued the proposed safe harbor could arrive too late in a project’s development. It asked for clearer protection for airdrops that reward network participation and for guidance on token buybacks. It also said the proposal leaves unclear whether unregistered intermediaries can help facilitate token trading, or whether tokens can trade freely through onchain protocols, and urged the SEC to address secondary market transactions directly.

Critics Want the Proposal Withdrawn

Former SEC enforcement official John Reed Stark and Duke University scholar Lee Reiners took the opposite view and urged the commission to scrap the plan. They argued it exceeds the agency’s authority, that existing securities laws and the Howey test already cover crypto offerings, and that self certification would let issuers pull tokens out of securities oversight.