TL;DR: The Hyperliquid Policy Center supports the SEC’s proposed crypto framework but says five changes are needed to make the rules workable for token developers and markets. The Hyperliquid Policy Center has welcomed the US Securities and Exchange Commission’s effort to clarify how securities law applies to crypto assets, while warning that details around distributions and trading could still create unnecessary barriers. In a comment published October 19, the group urged the regulator to revise its proposed Regulation Crypto Assets framework in five areas. Its concerns include how administrative steps in token airdrops are treated, how tokens can trade after an exempt distribution, and whether a safe harbour offers clear enough protection once a project has matured. The centre also wants clearer rules for token buybacks and a consistent approach to how federal exemptions interact with state securities requirements. The proposals reflect a long-running problem for cryptocurrency developers. A network token may begin life inside a fundraising arrangement, yet eventually circulate in a system where thousands of participants trade and use it without dealing directly with its original issuer. Drawing a line between those stages has been difficult under decades-old securities tests. The SEC’s proposal is intended to offer more predictable treatment, but the consultation process shows that industry participants still disagree about where the boundaries should fall. The advocacy group’s submission is not a regulatory decision. It is one contribution to a rulemaking process whose final outcome will depend on the commission’s response to the evidence and objections it receives. Written by the News Desk and edited by Samuel Rae.
Frequently Asked Questions
FAQs Hyperliquid Policy Centers Push for SEC Crypto Rule Changes
1 What is the Hyperliquid Policy Center
Its a policy group connected to Hyperliquid a decentralized crypto trading platform It advocates for clearer more workable crypto regulations
2 What is it asking the SEC to do
Its urging the SEC to make five specific changes to its crypto rulesmainly to reduce regulatory uncertainty for decentralized finance and crypto trading platforms
3 What are the five changes
The groups proposals focus on areas like clearer rules for decentralized platforms better guidance on which tokens count as securities updated custody rules more practical registration paths and safer ways for US users to access these markets
4 Why does this matter to regular crypto users
Clearer rules could mean safer access to crypto platforms fewer sudden shutdowns or restrictions and more consistent protection for US users
5 What is the SEC
The US Securities and Exchange Commissionthe federal agency that regulates securities markets It has significant say over how crypto is treated in the US
6 What is DeFi
Decentralized financecrypto platforms that run on smart contracts instead of a traditional company or middleman Hyperliquid is an example
7 Why is crypto regulation so unclear right now
The SEC has mostly applied existing securities laws case by case without tailored rules for crypto That leaves platforms and users guessing whats allowed
8 Whats the biggest complaint about current SEC rules
That they were built for traditional finance and dont fit decentralized technologyso compliance is unclear or practically impossible
9 What is a security and why does it matter
A security is an investment contract or similar financial instrument subject to SEC rules Whether a crypto token is a security determines which laws applyand thats a central dispute
10 How could these changes help the crypto industry
Clearer rules could encourage innovation in the US reduce legal risk for builders and keep projects from moving offshore
11 Whats a practical tip for staying informed
Follow official SEC statements and the Hyperliquid Policy Centers filings directly and be skeptical of secondhand summaries
12 Whats the counterargument
Critics worry that looser or