The Hyperliquid Policy Center (HPC) has formally backed a U.S. Securities and Exchange Commission (SEC) proposal to create a tailored regulatory framework for digital assets, filing a comment letter that urges the agency to adopt the rule — known as Regulation Crypto Assets — and recommending five refinements before it is finalized.

The SEC released the proposal in August. It would give token issuers a federal path to market through offering exemptions, a new safe harbor, and relief from state-by-state registration requirements. HPC's letter also addresses how the framework should treat airdrops, secondary trading, and buybacks.

Comment letters like HPC's are a routine part of SEC rulemaking: the agency reviews the submissions it receives before deciding whether to adopt a proposal as written or with changes. HPC's submission is aimed squarely at that stage of the process.

What the SEC Proposed Under Regulation Crypto Assets

The SEC devoted much of 2026 to clarifying how federal securities laws apply to tokens. In March, it issued an interpretation covering several forms of token distribution, including airdrops.

Before that guidance, the analysis was governed by a 1946 Supreme Court ruling in a case involving Florida citrus groves — SEC v. W.J. Howey Co., the decision that established the test for when a transaction qualifies as an investment contract. Amid the resulting uncertainty over when securities laws applied, many projects launched abroad or excluded American users.

In August, the SEC proposed the rule. A startup exemption would allow offerings of up to $5 million over four years, while a fundraising exemption would permit up to $75 million in any 12-month period. Tokens sold under these exemptions would also avoid state registration.

The proposal additionally establishes a safe harbor intended to confirm when a token no longer ties to an investment contract, and certain resales would receive the same state-level relief.

HPC announced its filing on X, describing the purpose behind its submission:

Today, HPC filed a comment letter supporting the @SECGov's proposed Regulation Crypto Assets and recommending five refinements before the Commission adopts it. For years, builders could not tell when the securities laws applied to their tokens, and many launched abroad or…

— Hyperliquid Policy Center (@HyperliquidPC) October 19, 2026

In the post, the group wrote that builders "could not tell when the securities laws applied to their tokens" and said the proposal "gives them a federal path." HPC added that many developers launched overseas or turned away American users because of that uncertainty.

The Five Refinements HPC Is Requesting

1. Airdrops. HPC asks the SEC to write the March analysis into the rule text, anchoring it to the "tangible and definable consideration" the Supreme Court requires. The group also says wallet connections and sanctions screening should not count as payment.

2. Secondary trading. The proposal does not specify how onchain protocols may facilitate resales. HPC cites the SEC's own economic analysis, which states that the rule's benefits "may be fairly small" without a liquid secondary market, and asks the agency to provide clarity at adoption.

3. Safe harbor. Projects would be required to certify that their essential managerial efforts are complete. HPC argues that some filers would effectively admit a past investment contract existed, and it wants a certification that no such contract existed, plus access to the safe harbor while development continues.

4. Buybacks. HPC asks that staff guidance on buybacks be incorporated into the final rule, with a single "central party" definition.

5. Preemption. The group asks that federal preemption survive once a project satisfies the safe harbor. Otherwise, it warns, tokens would face registration regimes in more than 50 jurisdictions.

HPC said it will continue engaging with SEC staff as the rule is finalized. The disposition of its five requests now rests with the Commission, and whether they appear in the final text will shape the framework U.S. token issuers ultimately operate under.

This article first appeared on Blockonomi.