Key Takeaways
- • Bitwise Asset Management and the Hyperliquid Policy Center filed comment letters on Monday urging the SEC to revise its proposed Regulation Crypto Assets, seeking clearer guidance on token classification, airdrops and secondary-market trading.
- • The SEC's public comment period on the proposal closes Tuesday, after which the commission will decide whether to revise, adopt or withdraw the rules; no final timetable has been announced.
- • Bitwise asked for a workable standard, based on publicly available information, for managers to determine whether a crypto asset is subject to securities laws, plus clarity on reliance on issuer Form TR filings.
- • Hyperliquid urged a broader safe harbor, protections for network-participation airdrops, guidance on token buybacks, and direct SEC treatment of secondary-market and onchain trading.
- • Former SEC enforcement official John Reed Stark and Duke University scholar Lee Reiners urged withdrawal of the entire proposal, arguing it exceeds statutory authority and would weaken investor protections and invite legal challenge.
Summary
Bitwise Asset Management and the Hyperliquid Policy Center are pressing the US Securities and Exchange Commission to revise its proposed crypto rules, according to comment letters submitted Monday. The requests come as the SEC closes public comments on Tuesday for its proposed Regulation Crypto Assets, which would create exemptions for qualifying crypto fundraising and a conditional safe harbor for tokens associated with investment contracts.
In an Oct. 19 comment letter, Bitwise Asset Management urged the SEC to clarify how investment managers should determine whether a crypto asset is subject to securities laws. The firm argued that managers need a standard they can apply using publicly available information. Bitwise also sought clearer rules on when managers can rely on an issuer's proposed Form TR filing, which would certify that an investment contract has ceased to exist, and how they should assess tokens when no such filing exists.
In a separate submission, the Hyperliquid Policy Center urged the SEC to broaden the proposed safe harbor, arguing that it could come too late in a project's development. The group called for clearer protections for airdrops that reward network participation, as well as guidance on token buybacks. Hyperliquid also warned that the proposal fails to provide clarity on whether unregistered intermediaries can facilitate token trading or whether tokens can trade freely through onchain protocols, and urged the SEC to address secondary-market transactions directly.
Not all commenters sought revisions. In an Oct. 16 comment letter, former SEC enforcement official John Reed Stark and Duke University finance scholar Lee Reiners urged the commission to withdraw the proposal entirely, arguing it exceeds the agency's statutory authority and would weaken investor protections. They said existing securities laws and the Supreme Court's Howey test already provide a framework for regulating crypto offerings, and that the proposed safe harbor would let issuers effectively remove tokens from securities oversight through self-certification. They also warned that adopting the rules in substantially their current form would invite an immediate legal challenge.
The SEC has not announced a timetable for a final decision. It will review the submissions before deciding whether to revise, adopt or withdraw the proposal, and any final rule would require a commission vote before taking effect.
In an Oct. 19 comment letter, Bitwise Asset Management urged the SEC to clarify how investment managers should determine whether a crypto asset is subject to securities laws. The firm argued that managers need a standard they can apply using publicly available information. Bitwise also sought clearer rules on when managers can rely on an issuer's proposed Form TR filing, which would certify that an investment contract has ceased to exist, and how they should assess tokens when no such filing exists.
In a separate submission, the Hyperliquid Policy Center urged the SEC to broaden the proposed safe harbor, arguing that it could come too late in a project's development. The group called for clearer protections for airdrops that reward network participation, as well as guidance on token buybacks. Hyperliquid also warned that the proposal fails to provide clarity on whether unregistered intermediaries can facilitate token trading or whether tokens can trade freely through onchain protocols, and urged the SEC to address secondary-market transactions directly.
Not all commenters sought revisions. In an Oct. 16 comment letter, former SEC enforcement official John Reed Stark and Duke University finance scholar Lee Reiners urged the commission to withdraw the proposal entirely, arguing it exceeds the agency's statutory authority and would weaken investor protections. They said existing securities laws and the Supreme Court's Howey test already provide a framework for regulating crypto offerings, and that the proposed safe harbor would let issuers effectively remove tokens from securities oversight through self-certification. They also warned that adopting the rules in substantially their current form would invite an immediate legal challenge.
The SEC has not announced a timetable for a final decision. It will review the submissions before deciding whether to revise, adopt or withdraw the proposal, and any final rule would require a commission vote before taking effect.
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