The U.S. Securities and Exchange Commission issued a “no action” letter to DoubleZero on Monday, effectively giving the green light to the project’s 2Z token just days ahead of its launch on Solana.
In a statement, the Commission announced that it “will not recommend [an] enforcement action” against DoubleZero, a company established last year that is developing a high-performance fiber-optic network for blockchains and utilizing tokens to motivate network participants.
The brief two-paragraph letter indicated that, according to their assessment of DoubleZero, the 2Z token does not qualify as a security. This marks the first time the SEC has made such a determination in years, following a period of stringent regulation against token issuers under prior leadership.
Just a week prior, DoubleZero had submitted a 17-page letter to the Commission, seeking its opinion on “programmatic transfers” to users engaging in the network.
Former SEC Chair Gary Gensler previously suggested that “everything but Bitcoin” should be classified as a security within the crypto space; however, the agency’s recent action suggests it does not view 2Z as under its jurisdiction, according to Jack Graves, a professor at Syracuse University College of Law.
“It effectively establishes a safe harbor based on a presumed set of facts,” Graves explained to Decrypt. “It provides clearer operational guidelines for everyone involved.”
The mainnet-beta network for DoubleZero is slated to launch on Friday. Users who contribute resources to the network will earn 2Z tokens as rewards, determined by their performance and reliability. Over time, tokenholders will have the opportunity to stake their 2Z tokens, according to DoubleZero’s website.
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The initiative was co-founded by Austin Federa, who previously held the position of head of strategy at the Solana Foundation. In a statement, he noted that this decision represents a significant achievement for the U.S. digital asset sector, reinforcing the SEC’s commitment to a more cooperative approach.
“This is more than just a win for one firmâit’s the kind of legal clarity and certainty that we need to spark a wave of innovation across decentralized networks,” said Miller Whitehouse-Levine, CEO of the Solana Policy Institute, in an interview with Decrypt. “No-action letters serve as a practical link between creators and regulators.”
DoubleZero positions itself as a decentralized physical infrastructure network, aligning with the concept of DePIN. This concept revolves around employing blockchain technology to manage and maintain decentralized networks of physical equipment, such as sensors.
In a statement, SEC Commissioner Hester Peirce, who is spearheading efforts to modernize securities regulations, remarked on how DePIN projects distinguish their use of tokens from assets typically under the SEC’s authority.
