SEC Grants DePIN Project DoubleZero “No-Action” Relief
The U.S. Securities and Exchange Commission (SEC) has issued a “no-action” letter to DoubleZero, a decentralized physical infrastructure network (DePIN) project, regarding the distribution of its native token, 2Z. This decision, delivered through the SEC’s Division of Corporation Finance, signals a potentially evolving stance on crypto regulation, particularly concerning utility tokens.
# Understanding the SEC’s Position
The no-action letter essentially means the SEC will not pursue enforcement action against DoubleZero’s distribution of 2Z, provided the token transfers adhere to the project’s outlined plans and 2Z is not registered as an equity security under the Exchange Act. Significantly, the SEC clarifies that this relief doesn’t constitute a comprehensive legal opinion and could be subject to change based on future circumstances. The decision hinges on the understanding that 2Z functions primarily as a utility token within the DoubleZero network, facilitating network operations, rather than serving as a speculative investment asset. This distinction is crucial in the SEC’s assessment.
While not a blanket endorsement of all DePIN projects or crypto initiatives, the SEC’s decision regarding DoubleZero offers a glimpse into how the agency might approach the regulatory landscape. The focus on utility and network function could pave the way for clearer guidelines and a more nuanced understanding of the diverse applications within the crypto space, potentially impacting how African tech startups leveraging blockchain technologies are viewed.
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