The Hyperliquid Policy Center (HPC) filed a comment letter on Monday supporting the SEC’s proposed Regulation Crypto Assets.
The group says the proposed draft is not clear enough about how airdrops, token buybacks, and secondary trading will be treated under securities law.
What does the Hyperliquid Policy Center want the SEC to change?
On 19 October, 2026, the Hyperliquid Policy Center (HPC) sent a letter addressed to SEC Secretary Vanessa Countryman stating that although it generally supports the SEC’s proposed Regulation Crypto Assets and wants it adopted quickly, the draft still lacks clarity.
The letter also contains five changes that could be made to the draft.
Most of the letter talks about airdrops, which are free tokens projects give users based on activity. Under U.S. law, tokens can count as securities if they are sold as an investment contract, however the group pointed out that the Supreme Court’s 1946 Howey ruling says an investment contract can only exist when a buyer gives up something of real value.
The SEC’s March 2026 interpretation also clarifies that an airdrop is not an investment contract, but the HPC wants that written clearly into the proposed Regulation Crypto Assets. It also wants it included in the rule that connecting a wallet or passing a sanctions check does not count as payment.
HPC also wants the SEC to be clear on how its rules apply once tokens are resold between traders, and where the middlemen involved in those trades stand under the law.
SEC staff recently said that announcing a buyback does not mean that a team is going to work to raise the token’s price, as long as the project already runs and no single party controls it.
The HPC wants the SEC’s buyback guidance written into the rule because it is good news for projects like Hyperliquid, whose Assistance Fund buys and destroys HYPE tokens automatically with 99% of eligible trading fees.
A part of the proposed rule that would let a token stop being treated as a security if the project meets certain conditions called a safe harbor” isn’t a full sentence.
In the current draft, a project must first state in writing that it has finished the work it promised to do to make the token succeed before it can claim safe harbor. The HPC says this wording not only sounds like an admission that the token was once an investment contract, but it also means a project can only get protection after it has stopped building.
HPC wants the rule altered so that projects will be able to state that their token was never an investment contract and also be able to claim the safe harbor while they are still building.
Regarding state law, HPC says the proposed draft cancels the state-law override once a project clears the safe harbor, which would leave tokens facing registration rules in more than 50 states and territories.
The HPC says projects might delay clearing the safe harbor in order to avoid the cluster of rules.
Why is the HPC getting involved in Regulation Crypto Assets?
The SEC proposed Regulation Crypto Assets on August 18, 2026, calling it a tailored framework for certain investment contracts involving crypto assets. The proposal comes after the agency’s March 2026 interpretation of how securities laws apply to crypto. The SEC says it also aims to cut the incentive for projects to set up offshore.
The plan lets small projects raise up to $5 million over four years, and larger ones up to $75 million a year.
The roughly 400-page proposal is the SEC’s first crypto-specific notice-and-comment rulemaking. The rule was published in the Federal Register on August 21, 2026, under docket number S7-2026-27, and comments are due October 20, 2026.
So why is Hyperliquid lobbying? HPC is led by crypto lawyer Jake Chervinsky. It was set up in February with a donation of 1 million HYPE tokens, worth about $28 million at the time.
Hyperliquid does not offer its platform to U.S. users. The center has been pushing both the SEC and the CFTC for rules that would let onchain derivatives operate under U.S. oversight.
Cryptopolitan’s earlier reporting states that real-world assets, such as tokenized stocks, made up about half of Hyperliquid’s trading volume by mid-September.
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