Bitwise Asset Management and the Hyperliquid Policy Center have asked the US Securities and Exchange Commission to revise parts of its proposed Regulation Crypto Assets, filing comment letters as the public feedback period closed on Monday.

Both submissions focus on areas the groups say remain unclear in the SEC proposal, including how token-related securities analysis should work in practice, when an investment contract is considered to have ended, and whether airdrops and secondary-market trading would receive meaningful protection under the draft framework.

Comment letters target key gaps in the proposal

The SEC’s proposed Regulation Crypto Assets would create exemptions for qualifying crypto fundraising and a conditional safe harbor for tokens tied to investment contracts. As the agency wrapped up public comments, Bitwise and Hyperliquid each argued that important parts of the proposal need to be more specific before market participants can rely on it.

Their letters were submitted Monday, with Bitwise’s dated Oct. 19. Although the two groups raised different concerns, both pressed the SEC to give clearer standards for participants trying to navigate securities-law questions around crypto assets.

Bitwise seeks a usable test for token classification

Bitwise told the SEC that investment managers need a practical way to decide whether a crypto asset falls under securities laws. According to the firm, that determination should be possible using publicly available information rather than facts that may be inaccessible to outside managers.

The asset manager also asked the SEC to clarify when firms may rely on an issuer’s proposed Form TR filing. Under the proposal, that filing would certify that an investment contract has ceased to exist. Bitwise further asked how managers should analyze tokens in cases where no such filing has been made.

Hyperliquid presses for broader safe-harbor protections

In its own submission, the Hyperliquid Policy Center argued that the SEC’s proposed safe harbor may arrive too late in a project’s lifecycle. The group urged the agency to expand the protection so it is more workable for token networks as they develop.

Hyperliquid specifically asked for clearer treatment of airdrops that reward participation in a network. It also said the SEC should provide guidance on token buybacks, another area it believes is left uncertain by the current draft.

Secondary-market trading remains a central concern

Hyperliquid also said the proposal does not clearly answer whether unregistered intermediaries may facilitate token trading, or whether tokens can move freely through onchain protocols. In its view, those unanswered questions leave both exchanges and decentralized trading venues exposed to continued regulatory uncertainty.

The group urged the SEC to address secondary-market transactions directly rather than relying on implications from other parts of the rule. That issue has become a major point in the broader debate over how crypto tokens should be treated once they begin trading beyond their initial distribution.

What comes next

The immediate next step is the SEC’s review of the public comments submitted on Regulation Crypto Assets. For now, Bitwise is seeking a more workable standard for asset managers, while Hyperliquid wants broader and earlier protections covering token distribution and trading activity.

Whether the commission incorporates those requests remains uncertain, but the letters highlight the same practical problem from different angles: firms want clearer rules on how tokens are classified, when securities-law obligations end, and what kinds of trading and token-related activity can proceed without regulatory ambiguity.

Source: cointelegraph.com