What an SEC No Action Letter Means for Solana DePIN Token DoubleZero

The U.S. Securities and Exchange Commission issued a “no action” letter to DoubleZero on Monday, effectively blessing the project’s 2Z token days before its debut on Solana.

In a statement, the Commission said that it “will not recommend [an] enforcement action” against DoubleZero, which was established last year, and is building a high-performance fiber-optic network for blockchains while using tokens to incentivize participants.

The two-paragraph letter indicated that, based on its understanding of DoubleZero, the project’s 2Z token does not resemble a security. That marked the first time the SEC had made such an assessment in years, following a crackdown on token issuers under previous leadership.

Less than a week ago, DoubleZero submitted a 17-page letter to the Commission, asking it to weigh in on “programmatic transfers” to users participating in the network.

Former SEC Chair Gary Gensler once suggested that “everything but Bitcoin” is a security in the cryptosphere, but the agency’s latest move indicates that it thinks 2Z does not fall under its purview, according to Jack Graves, a professor at Syracuse University College of Law.

“It creates, in effect, a safe harbor based on an assumed set of facts,” Graves told Decrypt. “It allows everyone to operate with a little more clarity.”

DoubleZero’s mainnet-beta network is expected to go live on Friday. And users contributing resources to the network are set to earn 2Z as a reward, in relation to their performance and reliability. Eventually, tokenholders will be able to stake 2Z, per DoubleZero’s website.

The project was co-founded by Austin Federa, who formerly served as the Solana Foundation’s head of strategy. In a statement, he said that the decision “marks a major milestone for the U.S. digital asset industry” because it backs up the SEC’s talk of taking a more collaborative stance.

“This isn’t just important for one company—it’s the kind of legal clarity and certainty we need to unleash a wave of innovation across decentralized networks,” Miller Whitehouse-Levine, CEO of the Solana Policy Institute, told Decrypt. “No-action letters are a practical bridge between builders and regulators.”

DoubleZero bills itself as a decentralized physical infrastructure network, falling under the umbrella of DePIN. The concept revolves around using blockchain to run and maintain decentralized networks of physical hardware, such as sensors.

In a statement, SEC Commissioner Hester Peirce, who is at the heart of Commission-wide efforts to modernize securities rules, described the way that DePIN projects use tokens as distinct compared to assets that it typically regulates.

“These tokens are neither shares of stock in a company, nor promises of profits from the managerial efforts of others,” she said. “They are functional incentives designed to encourage infrastructure buildout.”

Arie Trouw, co-founder and CEO of of DePIN project XYO, told Decrypt that the letter was a welcome signal that regulators are beginning to recognize the unique nature of these types of projects.

“These projects don’t fit neatly into traditional securities frameworks because they are not about speculative capital raises, they are about incentivizing people to build real-world infrastructure through participation and contribution,” he said.

He added that DePIN networks are set to grow from an estimated $30-$50 billion sector today to $3.5 trillion by 2028, according to the World Economic Forum (WEF) in its Technology Convergence Report. “For that potential to be realized, innovators and communities must be able to operate without the constant fear of regulatory misclassification,” Trouw said.

“Tokens in these contexts are not promises of equity or profit,” Trouw added. “They are functional rewards, compensate participants for their work, and help distribute infrastructure globally. Treating them as securities would stifle innovation at a time when DePIN is proving its ability to reshape trillion-dollar markets like telecom, logistics, and energy.”

The SEC has issued no action letters to crypto projects before, but Graves said the agency’s stance on Monday was still “fairly significant.”

He recalled one no-action letter in 2019, which allowed a company called TurnKey Jet to offer tokens that could be used to redeem on-demand private jet flights with clarity.

“That’s really not something that the SEC is concerned about,” he said. “But the people who are buying these tokens for private jet flights and operating Turnkey Jet can all move forward with a degree of confidence that they’re not going to have a securities violation problem.”

The SEC’s letter underscored several factors, including Turnkey Jet’s commitment to not funding its platform’s development with token sales, placing restrictions on the token’s ability to be transferred, and anchoring its marketing around the token’s functionality.

DoubleZero raised $28 million in a “token round” in March this year led by Multicoin Capital and Dragonfly. It received further investment from Galaxy in August.

The move continues the shift in the SEC’s posture toward digital assets, where recent months have seen the regulator quietly scaling back its most aggressive enforcement actions following the return of President Trump to the White House.

Several high-profile cases have been dropped or narrowed, including against the likes of Coinbase, Ripple, and Kraken.

Additional reporting by Callan Quinn

Editor’s note: This story was updated after publication to include additional comments and context.