Hyperliquid Urges SEC to Clarify Airdrop and Token Buyback Rules

Precedent & Market Context

The Hyperliquid Policy Center has urged the US Securities and Exchange Commission to clarify rules for airdrops and token trading, recommending five revisions to the proposed Regulation Crypto Assets framework. The group aims to provide greater legal clarity for crypto developers and token holders.

Main Event

In an October 19 comment letter, the advocacy group supported the SEC's proposal, which would allow qualifying crypto projects to raise up to $5 million over four years under a startup exemption or up to $75 million annually under a separate fundraising exemption.

Analysis & Market Impact

The framework, introduced in August, would also establish a safe harbor for tokens no longer associated with investment contracts and provide exemptions from certain state securities registration requirements. Hyperliquid Policy Center recommended that the SEC formally establish that token airdrops do not constitute securities transactions when recipients provide no tangible consideration in exchange.

Implications & Outlook

The recommendations come as the SEC moves toward finalizing its crypto regulatory framework, with the public comment period scheduled to close on October 20. HPC argued that greater legal certainty could encourage crypto developers to launch projects in the US rather than relocate overseas or exclude American users.

The Hyperliquid Policy Center has urged the SEC to clarify rules for airdrops and token trading, recommending five revisions to the proposed Regulation Crypto Assets framework. The SEC's proposal would allow qualifying crypto projects to raise up to $5 million over four years under a startup exemption or up to $75 million annually under a separate fundraising exemption. * The framework would establish a safe harbor for tokens no longer associated with investment contracts and provide exemptions from certain state securities registration requirements.