SEC grants first-ever no-action letter to DoubleZero

The SEC has cleared DoubleZero’s DePIN tokens, signaling that blockchain-based infrastructure rewards may fall outside U.S. securities laws.

The U.S. Securities and Exchange Commission has issued a rare no-action letter confirming that tokens distributed by DoubleZero, a decentralized physical infrastructure (DePIN) project, fall outside the scope of federal securities laws.

The letter, released on Sept. 29 by the SEC’s Division of Corporation Finance, stated that the agency would not recommend enforcement if DoubleZero’s programmatic transfers of its native 2Z token proceed under the conditions described by the company’s counsel in its Sept. 25 submission.

In that submission, DoubleZero’s legal team explained that the 2Z token is not designed as an investment vehicle but as a functional reward within its network. “Upon 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,” the filing stated.

The Foundation argued that these “Programmatic Transfers” are integral to the protocol’s operation and “are not required to be registered under the Securities Act,” nor should 2Z “be registered as a class of equity securities under the Securities Exchange Act.”

Why DoubleZero tokens fall outside securities laws

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—2Z tokens, for example, will be distributed as “programmatic transfers” to participants providing connectivity or performing network calculations.

Commissioner Hester Peirce commented that this structure separates DePIN tokens from traditional fundraising models often subject to the Howey Test—the legal framework used to determine whether an asset qualifies as a security.

“These tokens are neither shares of stock nor promises of profits from others’ efforts,” she stated, describing them instead as “functional incentives” for infrastructure growth. She said that classifying them as securities “would suppress the growth of networks of distributed providers of services.”

DoubleZero general counsel Mari Tomunen echoed her view, stating: “When the value of the token comes from other network participants’ work, Howey simply does not apply.”