The Hyperliquid Policy Center (HPC) has submitted five recommendations to the U.S. Securities and Exchange Commission (SEC), calling for clearer cryptocurrency regulations covering token airdrops, automated buybacks, secondary market trading, and developer protections.
In an October 19 announcement, HPC expressed support for the SEC's proposed Regulation Crypto Assets framework while recommending changes to improve regulatory certainty for decentralized finance (DeFi) projects and crypto trading platforms.
The SEC introduced the proposal in August, outlining two exemptions for eligible crypto token offerings. One would permit fundraising of up to $5 million over four years, while another would allow qualifying projects to raise up to $75 million annually.
HPC's first recommendation focuses on free token airdrops. The organization wants regulators to confirm that qualifying distributions do not constitute investment transactions. It also argues that establishing connections with users or completing sanctions screening should not automatically be considered payment.
The policy group also seeks clearer guidance on secondary token trading, particularly for decentralized exchanges and intermediaries facilitating transactions under the proposed exemptions. HPC believes regulatory uncertainty could restrict liquidity and discourage participation in blockchain networks.
Another key proposal addresses automated crypto token buybacks. HPC wants the SEC to distinguish predefined, automated repurchase mechanisms from discretionary buybacks controlled by project developers. It also recommends consistent definitions of controlling parties across the regulatory framework.
Regarding developer protections, HPC argues that blockchain projects should qualify for legal safeguards without automatically treating previously distributed tokens as investment contracts.
Its fifth recommendation calls for continued federal protections against overlapping state securities registration requirements after projects become eligible for the proposed regulatory safe harbor.
The latest submission follows HPC's earlier efforts to influence international crypto policy. On October 1, the organization urged European policymakers to regulate perpetual futures using existing derivatives frameworks.
Meanwhile, the SEC's October 20 public comment deadline marks an important stage in developing clearer U.S. cryptocurrency regulations.
The commission has not approved HPC's recommendations, and the proposed framework remains under review.
As the SEC and Commodity Futures Trading Commission (CFTC) advance separate digital asset regulatory initiatives, the outcome could significantly influence token issuance, decentralized trading, and compliance requirements across the U.S. crypto industry.
