Crypto Firms, Ex-SEC Official Clash Over Token Rules — SkimNews
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- Bitwise and Hyperliquid submitted comments to the SEC advocating for expanded safe harbors that would support token airdrops and onchain trading, arguing the current proposal lacks clarity for decentralized networks.
- Hyperliquid Policy Center warned the SEC’s proposed rule fails to clarify whether unregistered intermediaries can facilitate token trading or if tokens can freely trade on decentralized protocols, urging direct guidance on secondary markets.
- John Reed Stark and Lee Reiners submitted a joint comment letter on October 16 urging the SEC to withdraw the proposal, arguing it exceeds statutory authority and undermines investor protections established by the Howey test.
- SEC faces mounting pressure as the public comment period for its crypto rule proposal closed Tuesday, with no timeline set for a final decision or commission vote on adoption, revision, or withdrawal.
- Stark and Reiners argued the proposed safe harbor allows issuers to self-certify tokens out of securities oversight, weakening investor safeguards and inviting immediate legal challenges that could invalidate the framework.
Why it matters: The SEC’s decision will determine whether crypto projects can legally reward users via airdrops and trade on decentralized platforms without registration. If adopted as-is, the rule may face swift litigation, creating prolonged uncertainty for developers and investors betting on regulatory clarity.
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