First-of-its-kind determination affirms functional-use tokens, confirming shift in U.S. regulatory approach to digital assets
SEPTEMBER 29, 2025 – DoubleZero Foundation today announced it has received a first-of-its-kind no-action letter from the SEC’s Division of Corporation Finance confirming that the 2Z token flows to contributors on the DoubleZero network are not subject to the registration requirements under the Securities Acts.
This decision marks a major milestone for the U.S. digital asset industry, providing new regulatory clarity and reinforcing that the SEC recognizes meaningful distinctions between token transactions. It follows on "Project Crypto,” a recent initiative by the SEC to collaborate more closely with the crypto industry to establish clear guidelines for digital assets.
"No-Action Letters are one of the most pragmatic tools for navigating regulatory uncertainty in crypto, and the SEC's issuance of No-Action Letters shows that constructive engagement with regulators is possible,” said Amanda Tuminelli, Executive Director of DeFi Education Fund. “We appreciate that regulators are demonstrating a willingness to work with those creating new tools and technologies -- providing them with clarity and confidence to build."
DoubleZero is a high-performance dedicated fiber network built from underutilized private fiber links provided by multiple, independent contributors. This new internet empowers blockchain node operators with performance-first infrastructure, resulting in a network path that provides faster, more direct routing than the public internet, with technologies not previously available in crypto. 2Z tokens are distributed programmatically, rewarding providers in proportion to their marginal contributions and improvements to the network. Rewards are tied directly to verifiable work such as providing fiber connectivity, running computations, and maintaining service levels. [As the SEC noted,] the value of 2Z comes from network providers’ contributions, not speculative trading.
This action also helps other industry participants build with confidence. “This is yet another exciting outcome for builders in the United States and reflects the collaboration between industry and regulators that has driven so much meaningful progress over the past six months,” said Rebecca Rettig, Chief Legal Officer of Jito Labs. “The SEC is demonstrating a crucial understanding that crypto assets can and do play different roles across protocols. For certain protocols, tokens aren’t just financial instruments; they are integral to the operation of the technology itself. Making that distinction is a major step forward and creates the conditions for American builders to innovate with confidence.”
The regulatory clarity arrives just ahead of DoubleZero’s mainnet-beta launch later this week, with more than 21.5% of Solana’s mainnet stake already operating on DoubleZero. At launch, 11 independent contributors provide bandwidth connectivity and other resources to the DoubleZero Network. More contributors are expected to join, as the determination removes legal uncertainty for telecom operators, enterprise providers, and other regulated entities interested in monetizing their underutilized network capacity and engaging in this new web3 economy.
“This is more than a milestone for DoubleZero — it’s proof that U.S. founders and innovators can work with regulators to achieve clarity, and still move fast,” said Austin Federa, co-founder of DoubleZero. “By recognizing the functional nature of the 2Z token, the SEC has created space for compliant, utility-driven innovation in crypto, at home in America. This moment clears the path for DoubleZero to accelerate our mission of building a new internet for high-performance systems, while enabling contributors new to crypto to participate with confidence and clarity. I’d like to thank the SEC and the administration for their leadership in bringing clarity that helps crypto grow in the U.S. ”
DoubleZero Foundation engaged with the SEC over a four-month review process, providing detailed technical and economic documentation of the network’s design, token economics, and value model. The collaborative process resulted in a determination that can serve as a model for other projects seeking clarity without compromising decentralization or functionality.
“The DoubleZero protocol and 2Z token are designed with a utility-first approach, and the SEC recognized that our communications consistently reflected this,” said Mari Tomunen, General Counsel at DoubleZero. “For the legal world, this underscores that there is a path to launch a token. When the value of the token comes from other network participants’ work, Howey simply does not apply.” Chair Atkins has delivered tangible change, marking a departure from the prior administration. “Our team went in skeptical but was encouraged to see how collaborative and helpful the SEC was. They wanted to understand the technology and facts in detail, and helped us navigate the right framework.”
About DoubleZero
DoubleZero is a purpose-built network for modern, high-performance distributed systems. Leveraging fiber links from independent network contributors, DoubleZero offers increased bandwidth and reduced latency for high-performance blockchains by providing an open, decentralized, permissionless network. In short, the DoubleZero Network is a new internet optimized for distributed systems. To learn more, visit: https://doublezero.xyz/.
About DoubleZero Foundation
DoubleZero Foundation is an organization dedicated to the advancement, security, decentralization, and adoption of the DoubleZero protocol. The foundation works to support network contributors and the distributed and decentralized systems built on DoubleZero.