SEC May Refrain From Treating DoubleZero 2Z Token as a Security After No-Action Letter

The SEC’s no-action letter signals that DePIN tokens, such as DoubleZero’s 2Z, are not securities when they are programmatic transfers rewarding infrastructure contributors rather than investment contracts. This reduces enforcement risk and clarifies a pathway for launch without securities registration. SEC issued a no-action letter for DoubleZero’s planned 2Z token. DePIN tokens that compensate contributors for physical infrastructure work can be treated as functional tokens, not securities. Market reaction was muted: DePIN-related tokens fell ~2% in the past day per CoinGecko market data. DePIN tokens: SEC no-action clears uncertainty for DoubleZero’s 2Z token. Read COINOTAG analysis, implications, and actionable next steps. Get guidance. The SEC backed off from DePIN tokens in a rare no-action letter, as the agency’s top brass says it’s not meant to “regulate all economic activity.” The US Securities and Exchange Commission has signalled it will not recommend enforcement action against tokens tied to Decentralized Physical Infrastructure Networks (DePIN) in a specific no-action response to DoubleZero’s token plan. What are DePIN tokens and why did the SEC issue a no-action letter? DePIN tokens are blockchain tokens designed to incentivize contributors to distributed physical infrastructure (for example, private fiber or hardware). The SEC’s Division of Corporation Finance issued a no-action indication for DoubleZero’s planned 2Z programmatic transfers after concluding the described token mechanics and compensatory model fall outside securities registration requirements. How did the SEC define DoubleZero’s 2Z token in its response? The SEC’s chief counsel for the Division of Corporation Finance indicated the described programmatic transfers and the token’s utility characteristics mean the 2Z token is not being presented as a class of equity securities. Key points from the agency and stakeholders: Programmatic transfers to contributors were central to the SEC’s assessment. DoubleZero stated its protocol enables access to underutilized private fiber links managed by contributors; tokens are compensation for services. SEC Commissioner Hester Peirce emphasized the economic reality of DePIN differs from capital-raising securities. Source: Austin Federa How does this decision affect market and developer behavior? Front-loaded for clarity: the no-action indication reduces near-term enforcement risk for similar DePIN projects that design tokens as functional incentives rather than investment contracts. Practically, teams can prioritize infrastructure deployment over securities compliance in initial token designs—if token economics truly tie value to contributor activity. Market response was modest: DePIN-related tokens showed a roughly 2% decline in the last day, per CoinGecko data. That muted movement suggests the decision clarified regulatory exposure but did not dramatically change short-term trading sentiment. How can projects determine if a token is a security? Use this checklist to evaluate token classification. Document function: Show tokens compensate work or grant access to services, not shares of profit. Programmatic transfers: Prefer automated, non-discretionary mechanisms to distribute tokens. Economic reality: Keep token utility independent from managerial efforts promising profit. Legal review: Obtain counsel opinions and seek regulatory clarity (e.g., no-action letters) where feasible. Transparent governance: Publish protocols, contributor roles, and distribution mechanics clearly. { "@context": "https://schema.org", "@type": "HowTo", "name": "How to assess whether a DePIN token is a security", "description": "Step-by-step checklist for teams to evaluate token classification and prepare for regulatory review.", "image": "https://en.coinotag.com/wp-content/uploads/2025/09/01999835-02f2-7ac0-aada-3af21d76658b.webp", "totalTime": "PT72H", "step": [ { "@type": "HowToStep", "name": "Document token utility", "text": "Define how tokens are used to compensate contributors or enable access to infrastructure." }, { "@type": "HowToStep", "name": "Describe transfer mechanics", "text": "Show transfers are programmatic and not linked to investment returns from others' efforts." }, { "@type": "HowToStep", "name": "Seek written regulatory clarity", "text": "Consider submitting documentation to regulators for a no-action indication or written response." } ], "publisher": { "@type": "Organization", "name": "COINOTAG", "url": "https://en.coinotag.com" }} { "@context": "https://schema.org", "@type": "NewsArticle", "headline": "SEC No-Action Letter Clears Path for DePIN Tokens: DoubleZero’s 2Z Not Treated as Security", "image": ["https://en.coinotag.com/wp-content/uploads/2025/09/01999835-02f2-7ac0-aada-3af21d76658b.webp"], "datePublished": "2025-09-29T12:00:00Z", "dateModified": "2025-09-29T12:00:00Z", "author": { "@type": "Organization", "name": "COINOTAG" }, "publisher": { "@type": "Organization", "name": "COINOTAG", "logo": { "@type": "ImageObject", "url": "https://en.coinotag.com/wp-content/uploads/2025/09/01999835-02f2-7ac0-aada-3af21d76658b.webp" } }, "mainEntityOfPage": { "@type": "WebPage", "@id": "https://en.coinotag.com" }, "description": "The SEC issued a no-action indication for DoubleZero's 2Z DePIN token, signaling functional infrastructure tokens can be outside securities registration when transfers reward contributors programmatically."} { "@context": "https://schema.org", "@type": "FAQPage", "mainEntity": [ { "@type": "Question", "name": "Are DePIN tokens now exempt from securities laws?", "acceptedAnswer": { "@type": "Answer", "text": "Not categorically. The SEC’s no-action letter for DoubleZero indicates specific token mechanics can fall outside securities rules when tokens are functional compensation for contributors and transfers are programmatic." } }, { "@type": "Question", "name": "What did the SEC say about DoubleZero’s 2Z token?", "acceptedAnswer": { "@type": "Answer", "text": "The SEC’s Division of Corporation Finance stated it will not recommend enforcement action for the described 2Z program, finding the token mechanics do not require registration as a class of equity securities." } }, { "@type": "Question", "name": "How should projects respond to the no-action letter?", "acceptedAnswer": { "@type": "Answer", "text": "Projects should document token utility and transfer mechanics, consider counsel review, and use the decision to guide token design while continuing compliance monitoring." } } ]} Frequently Asked Questions Are DePIN tokens now exempt from securities laws? The SEC’s response is specific to the facts presented. DePIN tokens can be treated as non-securities when they function as compensation for infrastructure contributions and feature programmatic, non-investment transfer mechanics. What immediate steps should DePIN teams take after this ruling? Teams should document token utility and distribution mechanisms, seek legal review, and maintain transparent technical and economic disclosures to support similar regulatory assessments. Key Takeaways Regulatory clarity: A no-action indication can reduce enforcement risk for well-designed DePIN tokens. Design matters: Tokens intended as compensation for contributor work and distributed programmatically are more likely to be treated as functional. Do the work: Document mechanics, obtain legal review, and prepare disclosures to demonstrate non-security characteristics. Conclusion The SEC’s no-action letter for DoubleZero provides a practical precedent for DePIN tokens when token value arises from contributors’ infrastructure work and transfers occur programmatically. COINOTAG will continue tracking regulatory developments and advising teams to document design choices, seek counsel, and prioritize transparent disclosures as next steps.