The U.S. Securities and Exchange Commission has issued a rare no-action letter, confirming that it will not treat tokens tied to blockchain-based Decentralized Physical Infrastructure Networks, or DePIN, as securities. The letter, released on September 29 by the SEC’s Division of Corporation Finance, stated the agency would not pursue enforcement against DoubleZero Foundation if the group’s planned transfers of its 2Z token proceed under the conditions set out in a legal submission made about five days ago. It is one of the clearest statements yet from the SEC on how it views tokens used in decentralized infrastructure projects under President Donald Trump’s administration, which promised to create friendlier conditions for crypto companies looking to base themselves in the United States. At the time of this publication, DePIN tokens had a market capitalization of $33 billion, according to data from CoinMarketCap. SEC says DePIN tokens do not have attributes of a security In its September 25 filing with the SEC, DoubleZero’s counsel argued that the tokens were functional rewards for participants in its network, not speculative investments. On Monday, the SEC agreed that the arrangement did not fall under securities laws. SEC Commissioner Hester Peirce wrote a statement explaining that DePIN tokens differ fundamentally from traditional fundraising mechanisms. “These projects allocate tokens as compensation for work performed or services rendered, rather than as investments with an expectation of profit from the entrepreneurial or managerial efforts of others,” she said . Peirce admitted that the agency’s traditional test for identifying securities, the Howey Test, was ill-suited to DePIN structures. According to her, tokens such as 2Z are not shares of stock or claims on profits, but are there to encourage developers to build infrastructure. “DePIN projects are not selling or distributing tokens to finance additional development from investors attracted solely by the prospect of investment returns. Rather, DePIN networks programmatically distribute such tokens to users who participate in the network in accordance with network rules,” Peirce’s statement read. DePIN tokens are just rewards, not profitable securities DoubleZero is a Cayman Islands foundation established to support the development, decentralization, and adoption of its namesake network. Its system uses blockchain technology to coordinate and reward people who contribute real-world infrastructure resources like Wi-Fi and sensor networks, storage, or even energy grids. Regular people on DePIN can supply hardware, such as routers, dashcams, or solar panels, that would otherwise be controlled by large corporations owning operating systems. As a result, they are compensated in tokens when others utilize what they provide. The company’s September 25 filing explained that 2Z tokens would be distributed in two ways: first, as compensation to network providers for high-performance connectivity; and second, as compensation to resource providers who calculate payment amounts for those providers. “Treating such tokens as securities would suppress the growth of networks of distributed providers of services,” Commissioner Peirce reiterated. The SEC concurred with this sentiment, noting that the tokens were not designed as a class of equity securities and therefore did not require registration. “The economic reality of DePIN projects differs fundamentally from the capital-raising transactions Congress charged this Commission with regulating,” its letter stated. Austin Federa, co-founder of DoubleZero and a former strategy lead for the Solana Foundation, said the SEC’s no-action letter is proof the crypto industry can engage with regulators “and still move fast.” SEC enforcement takes steps back under Trump administration The SEC, led by new chair Paul Atkins in the Trump 2.0 administration, has scaled back what was once called “regulation by enforcement” in digital assets, alongside imposing more clearer frameworks to attract businesses to America. During a roundtable meeting with the Commodity Futures Trading Commission, which took place on the same day the no-action DePIN letter was published, Paul Atkins stated that crypto is the number one priority for the financial watchdogs. The SEC and CFTC, two of the United States’ primary financial regulators, are working together to divide oversight responsibilities in the digital asset market. If you're reading this, you’re already ahead. Stay there with our newsletter .
