SEC Declares DePIN Tokens Outside Securities Laws: What It Means for Crypto Regulation

Introduction

The U.S. SEC issued a rare no-action letter signaling it will not pursue enforcement against DoubleZero’s planned 2Z token, effectively acknowledging that certain DePIN tokens (Decentralized Physical Infrastructure Networks) can fall “fundamentally” outside securities jurisdiction. The SEC’s Division of Corporation Finance said the programmatic transfers described by the DoubleZero Foundation do not require registration and that 2Z is “not registered as a class of equity securities,” a key distinction under U.S. securities laws and the Howey test. This marks a notable shift in U.S. crypto regulation under the current administration’s enforcement rollback and offers a path to compliant token launches for network-incentive models.

SEC Commissioner Hester Peirce emphasized that Congress tasked the Commission with overseeing securities markets, “not to regulate all economic activity.” She framed DePIN tokens as functional incentives to compensate work performed and services rendered, rather than equity-like instruments promising profits from the efforts of others—an important regulatory signal for decentralized infrastructure builders. Treating such tokens as securities, Peirce argued, would suppress distributed infrastructure growth, and crypto infrastructure providers should focus on building rather than parsing securities-law minutiae.

For DePIN projects and investors, the implications are significant: tokenized incentives tied to real-world infrastructure—such as bandwidth, compute, or storage—may achieve regulatory clarity when structured to avoid capital-raising features. While DePIN tokens didn’t show an immediate price reaction, the decision could encourage compliant launches, broaden institutional exploration, and refine risk frameworks across crypto markets. Key SEO terms: SEC no-action letter, DePIN tokens, DoubleZero 2Z token, Howey test, crypto regulation, U.S. securities laws, Hester Peirce, decentralized physical infrastructure networks, token launch compliance, institutional adoption, crypto market structure (Cointelegraph, SEC no-action letter, CoinGecko DePIN category).

Background

In a rare move, the U.S. Securities and Exchange Commission (SEC) has signaled that Decentralized Physical Infrastructure Network (DePIN) tokens are “fundamentally outside” its jurisdiction. The decision came via a no-action letter regarding the planned 2Z token launch by DoubleZero, a blockchain project focused on incentivizing physical network infrastructure. This regulatory clarification suggests that not all cryptocurrency tokens fall under securities laws, providing fresh momentum for crypto builders seeking compliance clarity in the U.S.

According to the SEC’s Division of Corporation Finance, the transfer and distribution model proposed by DoubleZero does not amount to an equity security under U.S. law. Commissioner Hester Peirce, often referred to as the “Crypto Mom” for her more pro-innovation stance, emphasized that DePIN tokens are functional incentives, not investment contracts as defined under the Howey test—the long-standing legal framework that determines what qualifies as a security. In simpler terms, these tokens are designed to compensate participants who provide real-world infrastructure services (such as bandwidth, storage, or wireless connections), rather than to raise capital with expectations of profit from managerial efforts (Cointelegraph, SEC Statement).

Why the SEC’s DePIN Ruling Matters

The significance of this ruling cannot be overstated. By confirming that DePIN tokens are outside its enforcement scope, the SEC has carved out a clearer regulatory path for projects that rely on community-operated infrastructure—a fast-growing sector of blockchain often dubbed “the physical layer of Web3.” Analysts at Messari and research firms like CoinGecko point out that the DePIN market could grow to over $3 trillion by 2030, spanning industries from file storage (Arweave, Filecoin) to wireless networks (Helium, Pollen Mobile) and mapping/data protocols (Hivemapper, DIMO) (CoinGecko DePIN analysis).

This decision contrasts with the SEC’s recent enforcement against tokens tied to ICO-style launches, where investor funds were pooled with an expectation of profit. In the DoubleZero case, however, token distribution is tied directly to tangible work and service provision, making them “usage-driven” rather than “speculation-driven.” As Commissioner Peirce stated, forcing infrastructure tokens into a traditional securities framework would “suppress the growth of decentralized providers of services,” limiting the potential of blockchain technology to reshape physical networks.

Looking Ahead: Regulation, Innovation, and Institutional Adoption

The SEC’s no-action stance also illustrates the wider policy shift under the 2025 Trump administration, which has promised regulatory easing to attract blockchain innovation. At the same time, other jurisdictions are moving fast: the European Union’s MiCA (Markets in Crypto Assets Regulation) framework is already in implementation, and countries like Singapore and the UAE are introducing bespoke licensing for tokenized infrastructure services. This global race for crypto-friendly regulation underscores the U.S.’s need for clarity to retain its competitive edge.

For institutions and developers, this ruling adds legitimacy to DePIN projects and may encourage more funding, partnerships, and experimentation. While DePIN tokens lost about 2% market value on the day of the announcement—according to CoinGecko data—analysts note that regulatory clarity is more important than short-term price moves. As Austin Federa, DoubleZero co-founder and former Solana Foundation strategist, said: “This is proof that U.S. founders can work with regulators, achieve clarity, and still move fast.”

Going forward, crypto stakeholders should closely watch whether this no-action letter becomes a precedent for other token projects that link blockchain incentives to real-world services. If so, DePIN adoption could accelerate, transforming how global infrastructure—from internet bandwidth to IoT devices—is deployed and monetized, while reassuring builders and investors that innovation can coexist with regulatory compliance.