- Bitwise Asset Management’s 19 October letter asks the SEC to state when a token separates from an investment contract in terms a non-issuer can apply from public information.
- The Hyperliquid Policy Center supports the proposal and lists five refinements covering airdrops, secondary trading, the safe harbour, token buybacks and state preemption.
- Public comment on Regulation Crypto Assets, which would let issuers sell up to US$75 million (AU$107.25 million) of tokens a year under an exemption, closed on 20 October.
Bitwise Asset Management and the Hyperliquid Policy Center filed comment letters on 19 October asking the US Securities and Exchange Commission to sharpen its proposed Regulation Crypto Assets. Public comment on the rules closed the next day.
The SEC proposed the framework on 18 August with two registration exemptions for token sales, the smaller covering up to US$5 million (AU$7.15 million) over four years.
A safe harbour, Rule 400, would free a token from its investment contract once the issuer has completed or permanently ceased the managerial work it promised investors and certifies that on a new Form TR.
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A Test Fund Managers Can Apply
Bitwise issues no tokens. Since 2017 it has launched more than two dozen products, among them a Bitwise Hyperliquid ETF, and each launch requires a call on whether the asset risks being deemed a security. Bitwise told the SEC it makes that call from the outside, on public information, with no way to verify an issuer’s intentions.
If Bitwise reaches the wrong answer, the investors in its products bear the consequences.
Bitwise The letter, signed by general counsel Johanna Collins-Wood, asks the final rules to define that separation in terms a non-issuer can apply using publicly available information.
It also asks when a fund manager may rely on an issuer’s Form TR, and what to do when none exists. Bitwise argues the form should carry the issuer’s supporting analysis, because a bare certification gives an outsider nothing to act on.
Hyperliquid Group Lists Five Fixes
The Hyperliquid Policy Center, in a letter signed by chief executive Jake Chervinsky and senior counsel Brad Bourque, supports the proposal and urges prompt adoption with five refinements. The first asks the SEC to write the airdrop analysis from its March 2026 interpretation into rule text, so tokens earned by using a functional network involve no investment of money.
On trading, the group says the proposal fails to say whether unregistered persons can facilitate token transactions, or whether tokens can trade freely through onchain protocols. It wants secondary trades in such tokens confirmed as falling outside securities transactions.
The group also wants the safe harbour open during development, with milestones, and a certification option for projects that say their token never carried an investment contract.
On buybacks, it wants 28 September staff guidance written into the rule, with programmatic buybacks on published parameters separated from discretionary repurchases by a central party. The fifth would keep state preemption after a project satisfies the safe harbour.
Where Bitwise wants Form TR to carry a public analysis, the group asks that issuers be allowed to certify without one and hand any analysis to SEC staff confidentially.
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