Hyperliquid Policy Center Submits Five Recommendations on the SEC’s Crypto Asset Regulation Proposal

According to a comment letter submitted by the Hyperliquid Policy Center (HPC) to the U.S. Securities and Exchange Commission (SEC) on October 19, HPC generally supports the SEC’s proposed Crypto Assets Regulatory Framework (File No. S7-2026-27) and urges its prompt adoption. The proposal includes a $5 million startup exemption (four-year term), a $75 million fundraising exemption (every 12 months), a safe harbor for investment contracts, and state-level preemption for “qualified purchasers.” HPC also puts forward five recommendations:
1.
Airdrop: Incorporate the airdrop analysis into the final rule text, using “clear and specific consideration” as the standard for determining a “monetary investment”;
2.
Secondary market: Clarify secondary market trading and the role of intermediaries to enable assets issued under exemptions to be traded immediately outside the registered framework, and recommend exempting such transactions and platforms under Section 36 of the Exchange Act;
3.
Safe Harbor: Use should not be construed as an implicit acknowledgment of the existence of an investment contract or issuer status, and protection shall extend only during the period of key management activities;
4.
Repurchase: Incorporate the SEC’s Division of Corporation Finance’s recent repurchase guidance into the rules, unify the concept of “central party,” and distinguish between programmed repurchases and discretionary repurchases;
5.
Federal preemption: Issuers that meet the safe harbor conditions may opt out of reporting obligations or adopt a simplified annual certification to avoid state regulatory intervention.
HPC stated that, without the aforementioned adjustments, the actual proposal