The U.S. Securities and Exchange Commission (SEC) has granted its first-ever no-action letter to DoubleZero, a decentralized physical infrastructure (DePIN) project, confirming that its 2Z tokens fall outside federal securities laws. The decision marks a milestone in how regulators may treat blockchain-based rewards designed to incentivize physical infrastructure contributions.
What the SEC Decision Means
The letter, released on September 29 by the SEC’s Division of Corporation Finance, states that the agency will not pursue enforcement if DoubleZero distributes 2Z tokens under the framework outlined in the company’s September 25 legal submission.
According to DoubleZero’s counsel, the tokens are not intended as speculative investments but as functional rewards within the network. Specifically, 2Z tokens will be distributed to two types of participants:
- Network Providers, who supply high-performance connectivity.
- Resource Providers, who calculate payment amounts for those providers.
These “programmatic transfers,” the company argued, are essential for maintaining the system and do not fit the definition of securities under the Securities Act or Exchange Act.
Why DoubleZero Tokens Differ from Securities
DePIN projects like DoubleZero rely on blockchain incentives to coordinate contributions of real-world resources—such as bandwidth, energy, or mapping data. Unlike traditional tokens sold to raise capital, DePIN tokens function as operating rewards within an ecosystem.
SEC Commissioner Hester Peirce highlighted this distinction, noting that 2Z tokens “are neither shares of stock nor promises of profits from others’ efforts.” Instead, she described them as “functional incentives” that encourage participation and infrastructure growth. Treating them as securities, she cautioned, could stifle innovation in decentralized service networks.
DoubleZero’s general counsel, Mari Tomunen, echoed the point: “When the value of the token comes from other network participants’ work, Howey simply does not apply.”
A Landmark Moment for DePIN and Regulation
The SEC’s no-action letter provides rare clarity for blockchain builders navigating the uncertain line between utility tokens and securities. For DePIN projects in particular, it sets an important precedent by recognizing the operational role of network rewards rather than defaulting to securities classification.
