Sec’s bow to Doublezero carries a basic weight for decentralized infrastructure: Peirce
Before President Donald Trump and his friendly crypto regulators arrived, the US Securities and Exchange Commission had a Crypto advocate, Commissioner Hester Peirce, who was already arguing this week’s decision to give Doublezero a so-called no-action letter represents the type of space he has long wanted to offer Blockchain goals.
The SECTS SECTS In Startup request that the agency does not pursue any registration complaints for tokens issued for the specific purposes of the decentralized physical network of the doublezero (DEPIN). Commissioner Peirce suggested that this open door for depin efforts keeps the SEC in the business that it should not be.
“Instead of relying on centralized corporate structures to coordinate activity, depin projects have enrolled participants to provide real-world capabilities, such as storage, telecommunication bandwidth, mapping, or energy, through open and distributed peer-to-peer networks,” he said in a statement. The activity does not motivate the Howey Test of the Supreme Court – the test that decides what is falling into the area of the SEC – because such projects “provide tokens in return for the work performed or service provided, rather than an investment with hopes of income from entrepreneurship or management efforts.”
The SEC uses letters without action to explain what activities that do not intend to pursue implementation actions, so a letter to a single firm can signal to an entire space of what the agency’s current posture is. But in order to reap the benefits, the activity needs to be kept tight within the boundaries outlined in the Sec.
“The line between the law of tokens and security is becoming clearer,” Austin Federa, co-founder of Doublezero, said in a statement to CoinDesk. “Founders who sometimes spend a lot of time (and legal dollars) on this question can now focus on developing.”
Doublezero seeks to insult infrastructure providers for network connection, such as large technology companies that control surplus fiber networks, by paying them tokens – in this case, the native 2z of the protocol.
“Treating tokens such as security will prevent the growth of networks of shared service providers,” Peirce said. “Blockchain technology does not reach its full potential if we force all activities into existing financial regulation frameworks.”
The agency’s action has drawn praise from proponents of decentralized financial (DEFI). “Non-action letters are one of the most prejudiced tools for navigating uncertainty in crypto regulation, and SEC issuing letters without action shows that developing interaction with regulator regulators is possible,” said Amanda Tuminelli, executive director of the Defi Education Fund, said, Posting a Doublezero Foundation blog.
The SEC is pursuing an aggressive course of pro-crypto policy actions under chairman Paul Atkins. Earlier this week, he said at a roundtable event at the agency’s Washington Headquarters establishing clear policies for the digital assets sector was “Job One” for the SEC. Prior to Atkins, Peirce led the agency’s Crypto Task Force and was already working on policy statements to clarify the regulator’s expectations for the industry.
Read more: Doublezero’s ‘New Internet’ for Blockchain NABS $ 400m Appreciation from Top Crypto VCS
