# Hyperliquid Policy Center Proposes Five Revisions to SEC Crypto Rules HPC seeks regulatory clarity on airdrops, safe harbor provisions, and federal preemption for crypto. - **Source:** [CryptoPotato](https://brifing.si/source/bd22636b-ec8d-42a8-8cca-1937c50e0f6c) - **Published:** 2026-10-20 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/7dfbb4df-33e3-4d83-83e2-230c6abaa363 ## Regulatory Proposal Overview The Hyperliquid Policy Center submitted a formal comment letter regarding the SEC's proposed Regulation Crypto Assets. While supporting the initiative, the group identifies five specific areas requiring refinement. The proposal currently includes a startup exemption for token offerings up to five million dollars and a seventy-five million dollar fundraising threshold. ## Airdrop Classification Concerns HPC argues that airdrops where recipients provide no capital should not constitute investment contracts. They specifically request that network participation, such as running validators or providing liquidity, be excluded from payment definitions. Furthermore, the group asserts that routine wallet connections or mandatory sanctions checks should not be classified as consideration. ## Secondary Trading Ambiguity The policy center highlights a lack of clarity regarding secondary market trading for tokens issued under the proposed exemptions. They demand the SEC explicitly define how these assets can be traded. Additionally, the group seeks guidance on whether on-chain protocols and intermediaries can facilitate these transactions without undergoing full agency registration. ## Safe Harbor Certification Hurdles Current safe harbor requirements force developers to certify completion of managerial work, which may inadvertently imply prior securities law violations. HPC proposes that projects utilize the safe harbor without making such admissions. They also advocate for extending these protections to cover projects that are still in the active network development phase. ## Token Buyback Definitions HPC recommends that the SEC adopt a consistent definition of an issuer throughout the entire regulatory framework. The group urges the integration of existing staff guidance regarding buybacks. They specifically request a clear distinction between automatic buybacks governed by published code and those decided on a case-by-case basis by project teams. ## Federal Preemption Risks The current proposal suggests that federal protections expire once a project qualifies for the safe harbor. HPC warns this creates significant risks, potentially subjecting tokens to registration requirements across more than fifty different jurisdictions. They argue that federal protections must remain in place to ensure a unified and predictable legal environment. ## Historical Regulatory Context This push follows the SEC's March 2026 interpretation regarding token distributions and airdrops. For years, developers have faced persistent legal uncertainty regarding when tokens fall under securities laws. The agency's recent proposal aims to bridge this gap, yet industry groups remain concerned about the practical application of these new rules. ## Strategic Industry Implications The outcome of these requested changes will shape how crypto projects operate within the United States. By seeking to mitigate legal exposure, the Hyperliquid Policy Center aims to foster a more stable environment for innovation. The SEC's response to these five points will determine the final efficacy of the proposed regulatory framework. ## Sources covering this story - https://cryptopotato.com/hyperliquid-policy-center-pushes-sec-for-5-major-changes-to-proposed-crypto-rules/ — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._