SEC's Support for DoubleZero Carries Significant Weight for Decentralized Infrastructure: Commissioner Peirce

Prior to the Trump administration's crypto-friendly stance, Commissioner Hester Peirce was a long-standing advocate for the cryptocurrency space within the US Securities and Exchange Commission. Recently, the SEC granted DoubleZero a no-action letter, which Peirce believes represents a crucial step towards providing the necessary space for blockchain projects to flourish. The SEC staff agreed not to pursue registration complaints for tokens issued by DoubleZero's decentralized physical infrastructure network, a decision Peirce believes keeps the SEC out of areas where it shouldn't be involved. According to Peirce, DePIN projects utilize open and distributed peer-to-peer networks to provide real-world capabilities, such as storage, telecommunications, and energy, without relying on centralized corporate structures. This approach doesn't trigger the Howey Test, as the tokens are allocated as compensation for work performed rather than as investments with an expectation of profit. The SEC's no-action letter provides clarity on what activities the agency doesn't intend to pursue with enforcement actions, allowing the entire space to understand the agency's current stance. However, to reap the benefits, activities must strictly adhere to the boundaries outlined in the letter. Austin Federa, DoubleZero co-founder, stated that the line between tokens and securities law is becoming clearer, enabling founders to focus on building rather than navigating regulatory uncertainty. DoubleZero aimed to incentivize infrastructure providers by compensating them with tokens, in this case, the native 2Z token. Peirce emphasized that treating such tokens as securities would hinder the growth of distributed service provider networks, and that blockchain technology cannot reach its full potential if forced into existing regulatory frameworks. The agency's action has drawn praise from DeFi advocates, with Amanda Tuminelli, executive director of the DeFi Education Fund, stating that no-action letters are a pragmatic tool for navigating regulatory uncertainty in crypto. Under Chairman Paul Atkins, the SEC has been pursuing a pro-crypto policy agenda, with Atkins stating that establishing clear rules for the digital assets sector is a top priority.