Why the SEC's no-action letter became a turning point for crypto innovation

Recently, the U.S. Securities and Exchange Commission (SEC) has issued “No-Action Letters” to multiple crypto projects, which is seen by the industry as a significant shift in regulatory policy. This move not only provides legal protection for blockchain projects but, more importantly, opens the door for the development of utility tokens.

Two Cases Reveal the Future Direction of Utility Tokens

DoubleZero’s 2Z Token and Fuse Energy’s ENERGY Token have become beneficiaries of this policy shift. The key reason these two projects gained SEC recognition is that they have moved away from promising speculative returns and instead focus on network functionality and value.

The 2Z token incentivizes participants to improve the blockchain consensus mechanism and network performance, linked to specific contributions such as bandwidth optimization and latency reduction. The ENERGY token is directly related to energy efficiency and distributed energy resources, encouraging users to contribute in the real world. This design logic is entirely different from traditional investment products—users receive functional rewards rather than promises of speculative gains.

What Exactly Is a “No-Action Letter”?

An SEC No-Action Letter is a conditional commitment: as long as a project meets certain conditions, the regulator will not initiate enforcement actions. While this document is not legally binding, it provides clear compliance guidance for development teams and startups.

Previously, crypto projects faced a gray area. Founders did not know whether their tokens would be considered securities, nor what operational methods would meet regulatory requirements. This No-Action Letter is akin to a “regulatory map”—telling you which practices are permissible.

How the Howey Test Determines a Token’s Fate

Whether a token is considered a security under U.S. law depends on the “Howey Test,” which examines four elements:

1. Investment of Money – whether funds are invested
2. Common Enterprise – whether it belongs to a unified business
3. Profit Derived from Efforts of Others – whether profits depend on third-party operations
4. Expectation of Returns – whether returns are promised

The key distinction here is that utility tokens emphasize use value and network contribution, not investment returns. Both 2Z and ENERGY successfully avoid the core securities criterion of “profits derived from the efforts of others” by tying their value to specific functionalities (consensus improvement, energy efficiency).

The DePIN Wave Gains Regulatory Recognition

The recent SEC decision effectively greenlights decentralized physical infrastructure networks (DePIN). The core logic of DePIN is to use blockchain incentives to motivate real-world contributions—whether improving internet coverage, optimizing energy use, or enhancing other physical infrastructure.

Once regulatory uncertainty is alleviated, the development space for such projects expands rapidly. Developers can boldly design token economic models without constantly fearing classification as illegal securities. This is a liberation for the entire crypto ecosystem.

Why the New Leadership Has Changed Its Attitude

The SEC’s new leadership team includes commissioners more friendly to crypto, most notably Hester Peirce. Their attitude is noticeably more open than their predecessors, willing to communicate with the industry rather than oppose it outright. This shift is reflected in the issuance of no-action letters—an expression of cooperation rather than suppression.

The dialogue between regulators and the crypto industry is entering a new phase. Both sides realize that a nuanced approach—guided regulation—is more effective than outright bans. Establishing clear compliance standards can protect investors while encouraging innovation.

The Correct Approach to Token Economic Design

Tokens that successfully pass SEC scrutiny share a common feature: reward mechanisms directly linked to measurable contributions.

For example, with 2Z, every action a user takes—whether validating, relaying, or improving consensus—can be directly rewarded with tokens. This is not “you invest money, and I pay you interest,” but “you contribute, and you get rewarded.” Similarly, ENERGY incentivizes users who genuinely improve energy efficiency and participate in distributed energy networks.

This design offers clear lessons for startups: treat tokens as functional tools rather than fundraising instruments—that’s the way to get regulatory approval.

Will the Global Market Follow Suit?

Regulatory breakthroughs in the U.S. often create ripple effects worldwide. Other countries and regions will observe, evaluate, and gradually follow suit. This time, the SEC’s no-action letter could set a new standard for global crypto regulation.

The eventual scenario may be: recognition of utility tokens becomes an international consensus, while regulation of speculative tokens becomes more standardized. Such differentiation is healthy for the ecosystem—quality projects gain room to grow, while speculative excesses are curbed.

Implications for Crypto Startups

For founders seeking compliant operations, there is now a clearer roadmap. The SEC’s no-action letter indicates:

• Token design should focus on actual functionality
• Reward mechanisms should be tied to genuine contributions
• Avoid any investment return promises
• Maintain transparent communication with regulators

While these principles seem strict, they are actually protective—if you follow this framework, your project can gain legal certainty in the U.S. market.

Summary

The SEC’s no-action letter marks a transition in the crypto industry from “wild growth” to “orderly innovation.” Projects focused on practical value and true to the essence of tokens now have a better environment to survive. Pioneers like DoubleZero and Fuse Energy have demonstrated that with the right design philosophy and cooperation with regulators, it is possible to innovate and stay compliant. Future crypto market competition will no longer be about “who raises the most funds,” but about “whose tokens are the most practical.”