Utility Tokens and Regulatory Clarity in DePIN: How DoubleZero's SEC No-Action Letter Sets a New Precedent

The U.S. Securities and Exchange Commission's (SEC) recent no-action letter to the DoubleZero Foundation marks a pivotal moment in the evolution of decentralized infrastructure projects (DePIN). By granting regulatory clarity for utility-driven tokenomics, the decision not only validates a novel economic model but also signals a shift in how decentralized systems can align with securities law without sacrificing innovation. For investors and developers alike, this precedent offers a blueprint for navigating the thorny intersection of token utility and compliance.

The DoubleZero Framework and SEC's No-Action Relief

On September 29, 2025, the SEC's Division of Corporation Finance issued a no-action letter to the DoubleZero Foundation, a Cayman Islands-based entity building a DePIN to optimize blockchain networks using underutilized fiber capacity. The relief allows the Foundation to distribute its native 2Z token through programmatic transfers-specifically, Provider Payments (compensating Network Providers for fiber capacity) and Computation Payments (rewarding Resource Providers for maintaining network integrity)-without registering the token under Section 5 of the Securities Act or registering it as a class of equity securities under Section 12(g) of the Exchange Act according to the SEC's guidance.

The SEC's decision hinges on the Foundation's argument that the 2Z token's value is derived from the efforts of participants, not the Foundation or third parties. This aligns with the Howey test's criteria for investment contracts, which require an investment of money in a common enterprise with profits derived from another's efforts. By structuring token distributions to emphasize utility-such as incentivizing infrastructure contributions over speculative returns-the Foundation sidesteps the investment contract classification.

Implications for Tokenomics Compliance in DePIN

The DoubleZero case underscores a critical shift in regulatory expectations for utility tokens. Unlike traditional token models that often blur the line between utility and investment, DePIN projects like DoubleZero demonstrate how tokens can function as incentive mechanisms for decentralized infrastructure. According to a report by , the SEC's relief reflects its recognition that DePIN tokens are "not investment vehicles but tools for coordinating distributed resources."

This distinction is vital for tokenomics design. The Foundation's emphasis on utility-such as using 2Z to secure network capacity or validate computations-ensures the token's value is tied to its functional role rather than speculative demand. As stated by SEC Commissioner Hester Peirce, DePIN projects "fundamentally differ from capital-raising transactions" and should be evaluated under frameworks that account for their operational distinctiveness.

For investors, this clarity reduces the risk of regulatory overreach stifling innovation. By adhering to the SEC's outlined conditions-such as avoiding promotional language that implies investment returns-DePIN projects can attract capital while maintaining compliance. This creates a virtuous cycle: regulatory certainty encourages institutional participation, which in turn accelerates the adoption of decentralized infrastructure.

Broader Industry Impact and Future Outlook

The DoubleZero precedent could catalyze a wave of DePIN projects seeking similar regulatory relief. By demonstrating that utility tokens can coexist with securities laws, the Foundation has set a benchmark for structuring token distributions. As noted by legal experts at Bull Blockchain Law, the decision "promotes innovation while adhering to regulatory guardrails," offering a template for projects aiming to avoid securities law pitfalls.

However, challenges remain. The SEC's approach, while pragmatic, is not a blanket endorsement of all utility tokens. Projects must rigorously document their token's utility and ensure that marketing efforts avoid investment-related claims. For instance, DoubleZero's public communications focus on 2Z's role in optimizing fiber networks, a strategy that could be replicated by other DePIN initiatives.

Looking ahead, the SEC's engagement with crypto projects-evidenced by this no-action letter-suggests a willingness to adapt its enforcement priorities to technological advancements. This could pave the way for more nuanced interpretations of securities law, particularly for projects that prioritize infrastructure development over profit-sharing.

Conclusion

DoubleZero's SEC no-action letter is more than a regulatory win; it is a foundational milestone for the DePIN ecosystem. By establishing a clear framework for utility token compliance, the decision empowers developers to build decentralized infrastructure without the shadow of enforcement actions. For investors, this represents an opportunity to participate in projects that are not only technologically transformative but also legally resilient. As the crypto industry continues to mature, the DoubleZero precedent may well serve as a cornerstone for the next era of decentralized innovation.