DoubleZero’s SEC Win: First Token No-Action Letter in Years

September 29, 2025, marked a significant milestone for the crypto and decentralized infrastructure world.

The U.S. Securities and Exchange Commission’s (SEC) Division of Corporation Finance issued a no-action letter to DoubleZero, signaling it would not recommend enforcement action against the project’s launch of its 2Z token, so long as the token is distributed under the described Programmatic Transfers.

This is the first token-related no-action letter in several years, and it sets an important precedent for projects delivering real-world utility rather than speculative investment opportunities.

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A Landmark Signal for Token Compliance

The DoubleZero no-action letter represents a rare moment of regulatory clarity in the U.S. token landscape, offering assurance that the SEC will not pursue enforcement when distribution models are structured for genuine utility. It underscores that tokens designed for consumptive use rather than speculative profit can avoid classification as securities. 

This approach is particularly significant for DePIN and other infrastructure-driven projects, as DoubleZero’s focus on decentralized, high-performance fiber connectivity demonstrates how real-world utility can align with compliant token flows.

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DoubleZero in Brief

As blockchain networks scale, they often face bottlenecks due to reliance on the slow and congested public internet. DoubleZero aims to solve this problem by building a decentralized marketplace for connectivity, enabling faster, more reliable infrastructure for Web3 systems.

Here’s a snapshot of what’s going on:

• The Problem: Traditional internet pathways limit blockchain performance, increasing latency and reducing reliability for validators and users.
  
• The Solution: DoubleZero unlocks underutilized private and dark fiber links, creating a marketplace for high-performance connectivity that supports decentralized applications.
  
• The 2Z Token:
  
  • Users pay in 2Z to access enhanced network performance.
    
  • Network Providers earn 2Z by supplying bandwidth.
    
  • Resource Providers receive 2Z for delivering computation and telemetry that keep the system optimized.

By combining real-world infrastructure with token-based incentives, DoubleZero provides a blueprint for practical, utility-driven DePIN projects that can meet both performance and regulatory expectations.

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SEC’s Reasoning: Why 2Z Is Not a Security

According to the SEC’s response and Cooley LLP’s analysis, the Programmatic Transfers of 2Z tokens fail the fourth prong of the Howey test, as there’s no reliance on the managerial efforts of others for profits.

Key takeaways:

• Earned, Not Granted: Both Network Providers and Resource Providers must invest significant effort, capital, and ongoing operations to earn 2Z.
  
• No Passive Profits: Token rewards depend on real performance (bandwidth, latency, computation), not on speculation or Foundation-driven growth.
  
• Utility Emphasis: The Foundation has consistently marketed 2Z for its use in the network, not as an investment opportunity.
  
• Secondary Markets: Even if one develops, it’s primarily driven by users’ need for 2Z to access bandwidth, not by speculative profit expectations.
  

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Industry Implications

The SEC’s no-action letter for DoubleZero sends an essential signal to the broader Web3 and DePIN ecosystem. It highlights how carefully designed token models, anchored in real utility and decentralized participation, can align with regulatory expectations. 

This development not only offers a practical roadmap for compliant token design but also reflects a more pragmatic approach by regulators, opening the door for infrastructure-driven projects to innovate with reduced enforcement risk.

Here are the key points:

1. Blueprint for Token Utility: The case provides a roadmap for DePIN and Web3 infrastructure projects on structuring token economics to pass regulatory scrutiny.
   
2. Decentralization as Compliance: The distributed efforts of network and resource providers were key to avoiding securities classification.
   
3. Reduced Enforcement Risk: Projects focused on clear, consumptive-use cases may have a stronger footing under U.S. securities law.
   

Signal of Regulatory Pragmatism: Suggests the SEC’s willingness to recognize bona fide utility models, especially when accompanied by responsible marketing and governance.

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What’s Next

Although the SEC’s no-action relief applies only to DoubleZero’s specific facts, it is likely to encourage other Web3 and DePIN projects to seek similar clarity. To follow this path, projects should prioritize utility over speculation, ensuring that marketing highlights the token’s functional use rather than profit potential. 

Token distribution should reward active participation and contributions, not passive holding, and the project’s success should hinge on decentralized network activity rather than promoter-driven efforts. This approach can help projects align with U.S. securities law and reduce enforcement risk as the regulatory landscape evolves.

Projects aiming for compliant launches should note:

• Marketing must emphasize utility and use, not profits.
  
• Token flows should tie rewards to active contributions, not passive holding.
  
• Decentralized operation and non-promoter-driven success strengthen the case against securities classification.