SEC Clears Way for Solana's DoubleZero Token, Boosting Crypto Innovation
The U.S. Securities and Exchange Commission (SEC) has made a significant move in the digital asset industry, issuing a 'no action' letter to Solana-based project DoubleZero regarding its 2Z token. This decision, celebrated by SEC Commissioner Hester Peirce, provides legal clarity and encourages innovation in the market.
DoubleZero, co-founded by Austin Federa, former head of strategy at the Solana Foundation, raised $28 million in a token round led by Multicoin Capital and Dragonfly in March 2023. The SEC's recent decision marks a major milestone, as it has not issued such letters to crypto projects before. The 'no action' letter confirms that the 2Z token is not classified as a security, as token holders cannot reasonably expect profits solely from others' managerial efforts, failing the fourth prong of the Howey test.
The SEC's decision was based on several factors, including DoubleZero's commitment to not funding its platform's development with token sales and placing restrictions on the 2Z token's transferability. This signals the SEC's willingness to exempt certain decentralized physical infrastructure network (DePIN) tokens from securities regulations. The 2Z token is set to debut on Friday alongside DoubleZero's mainnet launch, with token holders eventually able to stake 2Z. Users contributing resources to the network will be rewarded based on their performance and reliability.
The SEC's 'no action' letter to DoubleZero is a significant step forward for the U.S. digital asset industry, providing regulatory clarity and encouraging innovation. The 2Z token, not classified as a security, will debut on Friday, with staking and rewards systems in place. This decision sets a precedent for future crypto projects, offering a clear path to legal compliance and market acceptance.
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