Bitwise Asset Management and the Hyperliquid Policy Center submitted comment letters to the U.S. Securities and Exchange Commission on Monday, asking the agency to revise its proposed Regulation Crypto Assets. Their requests center on how tokens should be classified, how airdrops should be treated, and what rules should apply to secondary-market trading. Under the proposal, the SEC would create an exemption for qualifying crypto fundraising and a conditional safe harbor for tokens tied to investment contracts. Bitwise asked the regulator to spell out the standard investment managers should use when deciding whether a token falls under securities law. Hyperliquid’s policy arm called for a broader safe harbor and asked the SEC to clarify the treatment of airdrops used to reward network participants, token buybacks, whether unregistered intermediaries can facilitate token trades, and whether tokens can trade freely through onchain protocols. Opposition also came from former SEC enforcement official John Reed Stark and Duke University finance scholar Lee Reiners, who said the proposal should be withdrawn because it exceeds the SEC’s statutory authority and weakens investor protection. After the public comment period closes, the SEC will decide whether to revise, adopt, or withdraw the rule. Any final version would require a commission vote before taking effect.
Bitwise Asset Management and the Hyperliquid Policy Center submitted comment letters to the U.S. Securities and Exchange Commission on Monday, calling for changes to the agency’s proposed crypto rule and asking for clearer treatment of token classification, airdrops, and secondary-market trading.
The SEC’s proposed Regulation Crypto Assets would create an exemption for qualifying crypto fundraising and offer a conditional safe harbor for tokens linked to investment contracts.
What Bitwise and Hyperliquid asked for
Bitwise said the SEC should clarify the standard investment managers should use to determine whether a token is subject to securities laws.
The Hyperliquid Policy Center asked the agency to broaden the scope of the safe harbor and clarify the rules for airdrops that reward network participants, as well as token buybacks.
It also asked the SEC to explain whether unregistered intermediaries can facilitate token transactions and whether tokens can trade freely through onchain protocols.
Pushback against the proposal
Former SEC enforcement official John Reed Stark and Duke University finance scholar Lee Reiners called for the proposal to be withdrawn, arguing that it goes beyond the SEC’s statutory authority and weakens investor protection.
What comes next
After the public comment period ends, the SEC will decide whether to revise, adopt, or withdraw the rule. Any final rule would take effect only after a commission vote.
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