Hyperliquid Policy Center Backs SEC Crypto Rule With Five Changes

The Hyperliquid Policy Center (HPC) has asked the U.S. Securities and Exchange Commission to adopt its proposed Regulation Crypto Assets framework with five refinements, filing a comment letter on October 19, 2026, according to Blockonomi. The proposal, released in August, would give token issuers a federal route through offering exemptions, a new safe harbor and relief from state-by-state registration.

The group said builders long lacked certainty about when securities laws applied to their tokens, and that the proposal gives them a federal path. In its filing, HPC said uncertainty had led many developers to launch abroad or exclude American users. The comment period closes on October 20, 2026, one day after the letter was submitted; the SEC has not adopted the group’s requested changes.

Key facts

• HPC filed its comment letter on October 19, 2026, supporting the SEC’s proposed Regulation Crypto Assets and recommending five refinements.
• The August 2026 proposal includes a startup exemption allowing offerings of up to $5 million over four years and a fundraising exemption of up to $75 million in any 12-month period.
• The draft also adds a safe harbor tied to the completion or permanent cessation of a token issuer’s essential managerial efforts, plus relief from certain state registration requirements.
• The SEC opened public comment under file number S7-2026-27, with a deadline of October 20, 2026, as reported by Crypto.news.
• In March 2026, the SEC and the Commodity Futures Trading Commission issued a joint interpretation covering airdrops, staking and other blockchain activities, per Crypto.news.

The five requested changes

The first recommendation concerns airdrops. HPC wants the SEC to write its March analysis into the rule text, anchoring it to the “tangible and definable consideration” standard the Supreme Court’s 1946 citrus-grove precedent requires. Under that approach, connecting a wallet or completing sanctions screening would not count as payment for tokens. Cryptobriefing reported that the group framed these steps as administrative requirements rather than compensation.

The second addresses secondary trading. The draft does not explain how onchain protocols and other intermediaries may facilitate resales of tokens sold under the exemptions. HPC pointed to the SEC’s own economic analysis, which said benefits “may be fairly small” without a liquid secondary market, and asked for clarity at adoption. Crypto.news noted the group did not argue for blanket relief from exchange, broker or dealer rules.

Third, HPC challenged the safe harbor’s certification requirement. Filers must confirm that their essential managerial efforts are complete, which the group said could amount to an admission that a prior investment contract existed. It wants a certification that no such contract existed, and protections available while development continues.

The remaining two cover buybacks and preemption. HPC asked that staff guidance on token buybacks be folded into the final rule with a single “central party” definition, separating automated repurchases under published blockchain rules from discretionary purchases by centralized operators. It also wants federal preemption to survive once a project satisfies the safe harbor, warning that otherwise tokens would face registration regimes in more than 50 jurisdictions.

Why it matters

The letter puts a named protocol-linked advocacy group behind the SEC’s first dedicated rulemaking for token offerings, at a point when the agency is still shaping the text. If the preemption and safe harbor points are adopted, mature projects would keep federal treatment after development winds down rather than reverting to state-by-state registration. If they are not, the framework’s practical benefit for decentralized networks may be narrower than its supporters expect.

Crypto.news also noted that the proposal concerns specific securities law requirements and differs from the CLARITY Act, which would establish a broader statutory framework if enacted. The two reports agree on the five recommendations and the October 20 comment deadline; neither reports that any change has been accepted.

What to watch

The immediate marker is the October 20, 2026 close of the comment window. HPC said it will continue engaging with SEC staff while the rule is finalized, and the agency must weigh the public record before publishing a final version.

Disclaimer: This article is for information only and is not investment, financial or trading advice. Cryptocurrency prices are highly volatile. Always do your own research.

Sources: Blockonomi, Crypto.news, Cryptobriefing