The Hyperliquid Policy Center has urged the US Securities and Exchange Commission (SEC) to refine its proposed Regulation Crypto Assets framework, calling for clearer rules on token airdrops, secondary trading, safe harbors and buybacks. The recommendations arrive ahead of the October 20 public-comment deadline and could influence how crypto projects raise capital and distribute tokens in the United States.
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5 Proposed Changes Target Key Gaps in US Crypto Rules
In its October 19 submission, the Hyperliquid Policy Center backed the SEC’s proposed framework but called for five refinements. These include explicitly recognizing qualifying free airdrops, clarifying secondary-market trading, making the proposed safe harbor more practical, standardizing rules for token buybacks and preserving federal preemption of state registration requirements. The group argues that these changes would give developers clearer compliance expectations.
The SEC introduced Regulation Crypto Assets on August 18 to create a tailored framework for certain crypto-related investment contracts. Its proposal includes a startup exemption allowing offerings of up to $5 million over four years and a fundraising exemption covering up to $75 million in a 12-month period. Both would require disclosures, while the larger exemption would also impose financial-statement and ongoing reporting requirements. The proposal remains under consideration and is not yet final.
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Airdrop Rules Could Change How Crypto Projects Distribute Tokens
The Policy Center wants the SEC to explicitly incorporate its March 2026 interpretation of airdrops into the final rule. It argues that recipients who receive tokens without providing tangible and definable consideration should not automatically be treated as having invested money. Airdrops are commonly used to reward network participation, distribute token ownership and encourage early adoption.
The group also wants the SEC to clarify that administrative steps, such as connecting a wallet or completing sanctions screening to receive an announced airdrop, do not themselves constitute payment.
This distinction could matter for projects distributing tokens while maintaining compliance controls. Clearer rules could reduce uncertainty for developers and recipients, although the legal treatment would still depend on the circumstances of each distribution.
Secondary Trading and Safe Harbor Remain Major Concerns
The Policy Center argues that the proposal needs clearer rules for secondary trading of tokens distributed under the exemptions. Even if a token offering qualifies for an exemption, uncertainty over whether trading platforms or onchain protocols can facilitate resales could limit market access. The group wants the SEC to explain how intermediaries and decentralized trading systems can support these transactions under the framework.
It also objects to the proposed safe harbor’s requirement that projects certify they have completed or permanently ceased essential managerial efforts.
According to the Policy Center, this could create difficulties for projects that believe their tokens were never tied to an investment contract in the first place. It recommends allowing those projects to seek protection without making what could be interpreted as an admission of previous securities-law obligations.
October 20 Deadline Puts SEC Crypto Framework in Focus
The SEC’s official rulemaking page lists October 20 as the public-comment deadline. The Commission will need to consider submitted feedback before deciding whether to adopt the framework as proposed or make revisions. The Policy Center’s submission therefore arrives at a key stage in the process, although its recommendations do not guarantee changes to the final rule.
The debate has broader implications for US crypto development. More predictable rules could help projects plan fundraising, token distributions and trading arrangements without abandoning US users, while disclosure and antifraud requirements would remain important safeguards.
The final outcome will determine whether the framework provides workable pathways for crypto projects while maintaining investor protections and clarity around secondary markets.
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