SEC Issues No-Action Letter to DoubleZero on 2Z Token

The U.S. Securities and Exchange Commission’s Division of Corporation Finance has granted conditional relief to decentralized physical infrastructure project DoubleZero regarding the distribution of its 2Z token. In a no-action letter issued late Monday, the division stated it would not recommend enforcement action if programmatic transfers of the token are carried out as described and if 2Z is not registered as a class of equity securities under the Exchange Act.

The SEC emphasized that its position was based on specific representations provided by DoubleZero’s counsel, warning that any changes in circumstances could result in a different conclusion. The response clarified that the letter reflects only the agency’s enforcement stance and does not represent a legal determination.

Building Faster Blockchain Infrastructure

DoubleZero operates as a high-performance fiber network that leverages underutilized private fiber connections contributed by independent providers. Its goal is to deliver faster, more efficient routing for blockchain node operators compared with the public internet.

Commissioner Peirce Calls for Balance

In a separate statement, SEC Commissioner Hester Peirce highlighted the broader implications of the decision, urging regulators to support innovation within the SEC’s statutory role. She stressed that the commission was created to oversee securities markets, not to regulate all forms of economic activity.

Peirce argued that decentralized physical infrastructure networks represent a new model of collaboration, enabling participants to provide services such as storage, bandwidth, or energy through open systems. Tokens, she said, act primarily as incentives for building infrastructure rather than as investment contracts under the Howey Test. She added that blockchain technology cannot achieve its potential if every activity is forced into traditional financial market frameworks.

Industry Milestone and Path Forward

The DoubleZero Foundation described the decision as a major milestone for the U.S. digital asset industry, offering long-sought regulatory clarity. The ruling, following a four-month review process, aligns with the SEC’s recently announced Project Crypto initiative aimed at deeper engagement with the crypto sector.

DoubleZero co-founder Austin Federa welcomed the outcome, saying it demonstrates that U.S. innovators can collaborate with regulators while maintaining the speed of development. By recognizing the utility-focused design of the 2Z token, he added, the SEC has created space for compliant innovation within the United States.

The announcement comes just days before DoubleZero’s planned mainnet-beta launch. Earlier this year, the foundation secured $28 million in funding through a token round led by Multicoin Capital and Dragonfly Capital.