The U.S. Securities & Exchange Commission’s Division of Corporation Finance issued a no-action letter addressing DoubleZero’s token distributions intended to support the programmatic functioning of a decentralized physical infrastructure network (DePIN). In a statement, Commissioner Hester M. Peirce presented the letter as an example of engaging with innovation while staying within the SEC’s securities-market mandate. Peirce described DePIN projects as using open, distributed peer-to-peer networks to coordinate real-world services such as storage, telecommunications bandwidth, mapping, or energy, with tokens distributed as activity-based rewards to participants who run nodes or provide services. She argued these tokens are functional incentives rather than shares or profit promises tied to others’ managerial efforts, distinguishing them from capital-raising transactions and concluding that, on this economic reality, the Howey test is not satisfied.
U.S. Securities & Exchange Commission 2025-09-29
U.S. Securities & Exchange Commission staff issues DoubleZero no-action letter on DePIN token distributions
The U.S. Securities & Exchange Commission’s Division of Corporation Finance issued a no-action letter regarding DoubleZero’s token distributions for a decentralized physical infrastructure network. Commissioner Hester M. Peirce highlighted the engagement with innovation while adhering to the SEC’s mandate, arguing that these tokens serve as functional incentives rather than securities, thus not satisfying the Howey test.