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The SEC has cleared DoubleZero\u2019s DePIN tokens, signaling that blockchain-based infrastructure rewards may fall outside U.S. securities laws.<\/p>\n
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The U.S. Securities and Exchange Commission has issued a rare no-action letter<\/a> confirming that tokens distributed by DoubleZero, a decentralized physical infrastructure (DePIN) project, fall outside the scope of federal securities laws. <\/p>\n The letter, released on Sept. 29 by the SEC\u2019s Division of Corporation Finance, stated that the agency would not recommend enforcement if DoubleZero\u2019s programmatic transfers of its native 2Z token proceed under the conditions described by the company\u2019s counsel in its Sept. 25 submission<\/a>.<\/p>\n In that submission, DoubleZero\u2019s legal team explained that the 2Z token is not designed as an investment vehicle but as a functional reward within its network. \u201cUpon launch, 2Z tokens will be offered and sold to Network participants in two ways: (i) as compensation to Network Providers for their provision of high-performance network connectivity, and (ii) as compensation to Resource Providers for their calculation of Provider Payment amounts,\u201d the filing stated. <\/p>\n The Foundation argued that these \u201cProgrammatic Transfers\u201d are integral to the protocol\u2019s operation and \u201care not required to be registered under the Securities Act,\u201d nor should 2Z \u201cbe registered as a class of equity securities under the Securities Exchange Act.\u201d<\/p>\n <\/p>\n DePIN projects, like DoubleZero, represent a growing sector of blockchain innovation, using token incentives to coordinate contributions of physical resources such as storage, bandwidth, mapping data, or energy\u20142Z tokens, for example, will be distributed as \u201cprogrammatic transfers\u201d to participants providing connectivity or performing network calculations.<\/p>\nWhy DoubleZero tokens fall outside securities laws<\/strong><\/h2>\n