Bitwise and Hyperliquid Press SEC to Amend Proposed Regulation Crypto Assets

Bitwise Asset Management and the Hyperliquid Policy Center submitted comment letters to the US Securities and Exchange Commission (SEC), requesting modifications to the regulator's proposed Regulation Crypto Assets framework ¹. The submissions arrived as the public comment window closed ahead of SEC review ¹. The draft regulation proposes exemptions for qualifying token fundraising alongside a conditional safe harbor for tokens tied to investment contracts ¹. At the time of writing, $HYPE traded at $80.58, while $BTC changed hands around $82,684.

In an Oct. 19 submission, Bitwise urged the agency to establish a framework that asset managers can apply using publicly available data to determine whether an asset constitutes a security ¹. The firm also asked for concrete guidelines governing when investment managers may rely on an issuer's proposed Form TR—a filing intended to certify that an underlying investment contract has ended—and how to evaluate tokens lacking such documentation ¹.

Concurrently, the Hyperliquid Policy Center pressed the SEC to widen the scope of its safe harbor provisions ¹. The policy group warned that the safe harbor takes effect too late in project development lifecycles and lacks necessary guidance regarding network participation airdrops and token buybacks ¹. Hyperliquid also noted that the current draft leaves ambiguity around whether unregistered entities and onchain protocols may facilitate secondary-market trading, urging the commission to resolve secondary transaction status directly rather than leaving venues in uncertainty ¹. The engagement follows broader market developments, such as recent Ripple Prime integrations with Hyperliquid for derivatives infrastructure.

Pushback From Former Regulators

The industry's calls to adjust the proposal contrast with opposition from former SEC enforcement official John Reed Stark and Duke University scholar Lee Reiners ¹. In an Oct. 16 comment letter, Stark and Reiners urged the SEC to abandon Regulation Crypto Assets entirely ¹. They argued the initiative exceeds the commission's statutory authority, weakens existing investor protections under the Supreme Court's Howey test, and allows issuers to circumvent oversight via self-certification through Form TR ¹. Stark and Reiners warned that enacting the rules as drafted would prompt immediate judicial challenges that could invalidate the framework ¹.

Following the close of the comment period, the SEC must evaluate submitted feedback before determining whether to alter, adopt, or retract the regulatory package ¹. The commission has not scheduled a date for a final determination, which will require a formal vote among commissioners prior to implementation ¹.