- SEC clears DoubleZero’s 2Z token, confirming no security status.
- DoubleZero’s ruling sets precedent for decentralized infrastructure projects moving forward.
- Binance to list 2Z token, following SEC’s landmark decision.
The U.S. Securities and Exchange Commission (SEC) has determined that the 2Z token from DoubleZero does not qualify as a security. This comes after the SEC issued a no-action letter on September 30, affirming that DoubleZero’s 2Z token does not meet the criteria established in the Howey Test.
The letter marks a significant moment for decentralized projects, particularly in the Decentralized Physical Infrastructure Network (DePIN) sector, as it is the first time such a project has received explicit regulatory clarity regarding the status of its utility token.
In the letter, the SEC’s Division of Corporation Finance emphasized that the 2Z token is not designed to raise funds for the DoubleZero project. Rather, it serves as a means to reward participants within the network, which is a central characteristic distinguishing it from traditional securities.
SEC Commissioner Hester Peirce elaborated on this distinction, explaining that the token’s utility is integral to its role in the ecosystem, which does not rely on an expectation of profit from others’ efforts.
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A Step Forward for DePIN Ecosystem and Crypto Industry
This ruling extends beyond DoubleZero and provides a clearer regulatory path for other DePIN projects. According to Peirce, blockchain technology and decentralized models cannot thrive if traditional securities laws continue to be applied to them.
She further pointed out that the 2Z token, by rewarding network participants instead of raising capital, aligns with a new regulatory perspective that recognizes the importance of utility in decentralized ecosystems.
The SEC’s decision holds several immediate benefits for DoubleZero and the broader crypto community. For DoubleZero, it provides a solid legal foundation for further development and enhances investor confidence, as the project now has clarity regarding its token’s status.
This clarity will also encourage other DePIN projects to build similar models without fear of overstepping traditional securities laws. Furthermore, Binance Wallet has announced that it will list the 2Z token on its platform, providing increased visibility and liquidity for the token.
The SEC’s recognition of the utility-driven nature of the 2Z token is a pivotal development for the DePIN sector. It offers a clearer path forward for tokenized networks that prioritize rewarding users for their contributions rather than engaging in traditional fundraising practices.
By establishing that tokens like 2Z are not securities, the SEC has provided much-needed regulatory clarity, paving the way for more innovation in the decentralized infrastructure space.
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