The Hyperliquid Policy Center backed the SEC's Regulation Crypto Assets plan, seeking changes on airdrops, buybacks and secondary trading by Tuesday, Oct. 20.
Key Facts
The Hyperliquid Policy Center filed a comment letter on Monday supporting the SEC's proposed Regulation Crypto Assets and recommending five changes before the rule is adopted.
The group asked the SEC to codify its airdrop analysis, clarify secondary trading, rework the safe harbor, separate automatic from discretionary buybacks and keep federal preemption in place.
Public comments on the proposal are due on Tuesday, Oct. 20, according to the SEC.
The Hyperliquid Policy Center has urged the US Securities and Exchange Commission to adopt its proposed crypto token offering rules with five changes, including protections for airdrops and a split between automatic and discretionary token buybacks, a day before the comment period closes.
The proposal, known as Regulation Crypto Assets, would let projects raise up to $75 million a year under one exemption and create a conditional safe harbor from the term "investment contract," according to the SEC.
"For years, builders could not tell when the securities laws applied to their tokens, and many launched abroad or excluded Americans," the policy group wrote on X on Monday.
The group, which backed the CFTC in CME's perpetual futures lawsuit last month, said in its comment letter that it supports the rule and wants the SEC to adopt it.
Hyperliquid Policy Center's Five Asks on the SEC Token Rule
The group first asked the SEC to write into the rule that an airdrop, where recipients give nothing in exchange for tokens, involves no investment of money. It also wants steps such as connecting a wallet or clearing sanctions screening not to count as payment.
It asked the SEC to address whether onchain protocols and other unregistered intermediaries can facilitate trading in tokens distributed under the exemptions. The SEC's own analysis says the proposal's benefits "may be fairly small" if no liquid secondary market develops, the group noted.
On the safe harbor, the group said projects should be able to certify that their token was never tied to an investment contract, so they can use it "without a tacit admission of prior investment-contract or issuer status."
It also asked the SEC to distinguish buybacks that run automatically under published rules from discretionary ones, and said spread-out validators, network participants and users should not count as a controlling group just because their incentives align.
Finally, it asked that federal preemption of state registration continue after a project meets the safe harbor, warning that tokens would otherwise face "registration regimes in more than 50 jurisdictions."
Law Professors Urge SEC to Repropose Crypto Offering Rule
Some commenters want the rule reworked. Five securities law professors, including former SEC general counsel John Coates and Columbia's John C. Coffee Jr., wrote in an Oct. 7 letter that "Regulation Crypto as proposed is deeply flawed" and should at least be reproposed.
The SEC proposed the rule in August, and comments are due on Tuesday, according to the agency's rulemaking page. The SEC and CFTC have since signaled swift crypto rulemaking after the CLARITY Act failed in the Senate in September.
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