The United States’ Securities and Exchange Commission (SEC) has indicated that it currently has no intention of pursuing enforcement actions against tokens associated with Decentralized Physical Infrastructure Networks (DePIN).
According to a document
publicly available since September 30, Michael Seaman, serving as chief counsel within the SEC’s Division of Corporation Finance, stated that he “will not suggest any enforcement measures” regarding DoubleZero’s plan to launch its 2Z token.
Commissioner Hester Peirce, offering her
insights, pointed out that DePIN ventures operate in a significantly different manner compared to the investment schemes that Congress tasked the SEC with regulating. In her view, the agency’s primary role involves overseeing securities markets, not regulating every facet of economic activity.
Did you know?
Subscribe – We publish new crypto explainer videos every week!
How Does Cryptocurrency Work? (Explained with Animation)
DoubleZero had previously described its mechanism, which enables blockchain networks to utilize available fiber optic connections offered by individuals or organizations. Those contributing resources are slated to receive 2Z tokens as compensation.
The SEC concurred that this framework does not necessitate registration in accordance with securities regulations, also affirming that the tokens are not classified as equity shares.
Austin Federa, a co-founder of DoubleZero,
stated that this decision serves as a significant indicator that American projects can directly interact with regulators while continuing to make swift progress.
Peirce highlighted that this stance empowers developers to concentrate on expanding their networks instead of getting bogged down in intricate legal complexities. She characterized DePIN tokens as practical rewards provided for delivering services or accomplishing tasks, rather than as instruments representing ownership stakes or profit-sharing entitlements.
In closing, she cautioned that the full potential of blockchain technology might never be realized if existing financial regulations are indiscriminately applied to every blockchain-related activity.
The SEC recently updated its guidelines aiming to streamline the listing process for spot cryptocurrency exchange-traded funds (ETFs). Want to learn about the specifics of these rules?
Read the full story here.