The U.S. Securities and Exchange Commission’s (SEC) Division of Corporation Finance has provided a no-action letter concerning the distribution of the 2Z coin associated with the DoubleZero DePIN project. Announced late on Monday, the decision signifies that as long as altcoin transfers proceed in the manner outlined by DoubleZero, the SEC will not recommend any enforcement action. This ruling also does not require the registration of the altcoin under the Securities Exchange Act as a securities class.
SEC’s Decision on DoubleZero
The SEC based its decision on information provided by DoubleZero’s legal representatives, with the agency noting the possibility of reassessment should different circumstances arise. Importantly, the SEC emphasized that the decision solely reflects its enforcement stance and lacks definitive legal standing.
Commissioner Hester Peirce commented on the situation, reminding that the SEC’s mandate is limited to oversight of securities markets rather than all economic activities. She highlighted that DePIN projects direct participants to provide infrastructure services like storage and bandwidth, and such coin rewards encourage infrastructure development.
Peirce further expressed that coins used across various sectors should not be directly classified under securities contracts, and that technology-oriented projects should be evaluated according to their market functionality.
DoubleZero’s Roadmap
DoubleZero is recognized as a high-performance network aiming to collect unused private fiber connections to offer faster, direct routing to blockchain node operators. The company acknowledged this decision, following a four-month review, as a pivotal milestone for the U.S. cryptocurrency industry.
The DoubleZero Foundation stated that the decision provides regulatory clarity not only for them but for similar projects in the industry. Co-founder Austin Federa emphasized that America’s recognition of 2Z coin’s functional structure fosters opportunities for innovative ventures.
The project’s mainnet beta launch is anticipated this week, following a funding round in March led by Multicoin Capital and Dragonfly Capital, which raised $28 million. The legal clarity provided by the decision is expected to accelerate their growth plans.
SEC’s Decision Could Propel DePIN Projects Forward
Experts suggest that the SEC’s decision on DoubleZero’s 2Z coin is not confined to the project alone. It is perceived positively for the entire DePIN market, which includes projects like Bittensor, Internet Computer, Render, Filecoin, Theta Network, and Aethir. Furthermore, the ruling indicates a shift away from arbitrary interventions in cryptocurrency projects, akin to those seen in the pre-Trump administration era.
