Bitwise Asset Management and the Hyperliquid Policy Center have asked the U.S. Securities and Exchange Commission to make its proposed crypto rules more usable before they become final. Their October 19 comment letters appeared on the SEC's public docket as the October 20 comment window closed. Although the organizations focus on different parts of the proposal, both argue that market participants need clearer standards for deciding how tokens can be issued, held and traded.

Bitwise wants an observable test for token status

Bitwise writes from the perspective of a non-issuer that uses crypto assets in investment products. The firm says a mistaken decision about whether an asset remains tied to an investment contract can expose fund investors to consequences. It wants the final rules to state a separation standard that outside asset managers can apply using publicly available information rather than private knowledge held by a token issuer.

Related reporting: SEC Proposes Crypto Custody Rules for Advisers and Funds

The asset manager also asks the SEC to explain when non-issuers may rely on an issuer's proposed Form TR, which would report that a covered investment contract has ceased to exist. Bitwise argues that the form should include the issuer's analysis, not merely a conclusion, and that the rules should address what outsiders may do when no Form TR has been filed. Those requests are aimed at making classification decisions repeatable for funds and other intermediaries.

Hyperliquid focuses on airdrops and market access

The Hyperliquid Policy Center generally supports Regulation Crypto Assets but recommends five changes. It asks the Commission to put its airdrop analysis into final rule text, with a focus on whether recipients provide definable, tangible consideration. The group also wants direct treatment of secondary transactions and intermediary status so qualifying assets can trade on onchain protocols without leaving platforms uncertain about registration requirements.

Its other requests concern the proposal's conditional safe harbor, token buybacks and state law. The policy center wants protection while essential development work remains underway, not only after that work has ended. It also asks the SEC to distinguish programmatic buybacks that follow fixed, published parameters from discretionary repurchases controlled by a central party, and to make federal preemption of certain state registration rules durable.

The proposal is still subject to change

The SEC's August proposal would create a startup exemption for offerings of up to $5 million during a four-year period, a separate fundraising exemption of up to $75 million in a 12-month period and a conditional safe harbor tied to investment contracts. Hyperliquid's filing argues that those pathways may have limited value if projects cannot establish liquid secondary markets or determine which intermediaries may facilitate trading.

Independent coverage from Blockhead highlighted the policy center's requests on airdrops, decentralized trading and automated versus discretionary buybacks. The outlet also noted that the filing is a set of recommendations rather than policy. Bitwise's letter is similarly a comment from an interested market participant, not an SEC interpretation or a determination that any particular token is outside securities law.

What happens next

With the comment period closed, the SEC can review the submissions, revise the proposal or proceed toward a Commission vote. Any final text may differ from both the August draft and the changes sought by commenters. For crypto projects, asset managers and trading venues, the practical stakes are whether the framework provides enough public information to classify assets and enough certainty for lawful distribution and secondary trading. Until the Commission acts, the letters identify unresolved questions rather than settling them.

Sources

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