- SEC grants no-action relief to Solana’s Fuse token.
- FUSE token classified as utility.
- Potential precedents for similar utility tokens.
The SEC granted a no-action letter to Solana-based Fuse, designating its FUSE token as a utility token, on October 2023, providing regulatory relief and preventing it from being classified as a security.
This decision reinforces utility token precedence, potentially impacting other projects on Solana, while fostering positive sentiment towards DePIN models, despite minimal immediate market movement.
The U.S. Securities and Exchange Commission (SEC) issued a rare no-action letter to Fuse, a decentralized network on Solana. The decision categorizes the FUSE token as a utility, exempting it from being classified as a security.
Jonathan Ingram, Deputy Chief Counsel at the SEC, signed the letter, while Hester Peirce, leading the agency’s crypto task force, advocates for practical regulatory dialogues. This decision emphasizes Fuse’s utility-centric nature within the Solana ecosystem.
The no-action relief provides regulatory clarity, potentially boosting investor confidence and market sentiment around Solana and utility tokens. Key industry figures acknowledge the rarity of such decisions, amplifying its significance in the crypto sector.
While the FUSE token benefits directly, the broader cryptocurrency community sees this as a positive step for utility tokens. Regulatory assurance fosters development and aligns with evolving acceptance trends for real-world blockchain applications.
The FUSE token’s primary function involves network utility, not investment, aligning with the SEC’s relief criteria. Utility tokens like DoubleZero have seen similar rulings, underscoring potential paths for other viable utility-focused projects.
Long-term impacts could include increased regulatory engagement and adoption of utility models. This ruling presents a pathway for similar projects, highlighting a shift towards inclusive and pragmatic regulatory frameworks for blockchain technology.
“A no action letter is something that is pretty common in the TradFi but they’re very rare in crypto and they’re sort of a highly coveted letter.” — Austin Federa, Head of Strategy, Solana Foundation
