As the US Securities and Exchange Commission’s (SEC) public comment window closed on October 20, 2026, for its proposed Regulation Crypto Assets, two industry voices submitted detailed feedback seeking refinements that would reduce uncertainty for token classification, distributions, and trading.
Bitwise Asset Management and the Hyperliquid Policy Center filed separate comment letters dated October 19, urging the agency to adjust the framework before any final vote.
The proposal, released earlier in the year, aims to create tailored exemptions for certain crypto fundraising activities.
These include a startup exemption capped at $5 million over up to four years and a broader fundraising exemption allowing up to $75 million in any 12-month period.
It also outlines a conditional safe harbor for tokens that are no longer tied to investment contracts, along with measures that would limit certain state-level registration requirements for qualifying purchasers.
Bitwise, which builds investment products such as indexes and exchange-traded products using crypto assets but does not issue tokens itself, focused on practical challenges faced by non-issuers.
In its letter, the firm argued that asset managers need a reliable, consistent method to decide whether a given crypto asset falls under securities laws.
That determination, Bitwise said, should rest on information that is publicly available rather than insider knowledge available only to the token issuer.
The company further requested clearer standards governing when managers can rely on an issuer’s Form TR filing—the document that would certify an investment contract has ended—and how to evaluate tokens in cases where no such filing has been made.
Without these clarifications, Bitwise noted, firms that construct products for investors face ongoing difficulty and cost in assessing legal risk.
Separately, the Hyperliquid Policy Center, which advocates for clearer pathways for on-chain markets, generally supported the proposal while recommending five specific changes.
The group contended that the proposed safe harbor could become available too late in a project’s development cycle and asked the SEC to expand its scope so that projects still building their systems can access protection without implicitly conceding that their tokens previously constituted investment contracts.
On airdrops, Hyperliquid urged the commission to embed its earlier March 2026 interpretive guidance directly into the final rule text.
Under that approach, a free token distribution would not involve an “investment of money” when recipients provide no tangible or definable consideration; routine administrative steps such as connecting a wallet or completing sanctions screening would not count as payment.
The center also sought guidance distinguishing programmatic or automated token buybacks that operate under fixed, published rules from discretionary ones controlled by a central party, and it pressed for explicit treatment of secondary-market activity.
In particular, it highlighted uncertainty over whether unregistered intermediaries may facilitate trades and whether tokens may move freely through on-chain protocols, recommending that the SEC use existing authority to grant conditional exemptions for qualifying secondary transactions, including those on decentralized venues.
Not all comments were supportive.
Former SEC enforcement official John Reed Stark and Duke University finance scholar Lee Reiners submitted a letter calling for the proposal to be withdrawn.
They argued that the framework exceeds the agency’s statutory authority, that the existing Howey test already supplies an adequate legal standard, and that the exemptions and self-certification mechanism would weaken investor protections while inviting swift legal challenges.
With the comment period now closed, the SEC will evaluate the submissions and decide whether to revise, adopt, or abandon the rules. Any final version would still require a commission vote before taking effect. The outcome will shape how US projects structure token launches, distributions, and secondary liquidity in the coming years.
