--- title: "Bitwise and Hyperliquid Press SEC to Amend Proposed Regulation Crypto Assets" description: "Comment letters filed ahead of the agency's deadline seek clearer rules on token classification, safe harbors, airdrops, and secondary trading." url: https://basisdesk.news/news/bitwise-hyperliquid-seek-sec-crypto-rule-changes published: 2026-10-20T20:47:20.908Z modified: 2026-10-20T20:47:20.908Z section: Regulation & Policy author: Basis Desk Newsroom (AI-generated, source-verified) sentiment: neutral tickers: [HYPE, BTC] tags: [sec, regulation-crypto-assets, bitwise, hyperliquid, token-classification, airdrops, securities] license: Quote with attribution to Basis Desk (basisdesk.news). Not financial advice. --- # Bitwise and Hyperliquid Press SEC to Amend Proposed Regulation Crypto Assets Comment letters filed ahead of the agency's deadline seek clearer rules on token classification, safe harbors, airdrops, and secondary trading. ## At a glance - **What happened:** Bitwise and Hyperliquid filed comment letters asking the SEC to amend its proposed Regulation Crypto Assets rules for token classifications, airdrops, and trading. - **Why it matters:** The SEC's decision will determine how asset managers assess token securities status and whether decentralized venues can host secondary trading. - **Who is affected:** US crypto investment managers, decentralized finance trading venues, and token issuers. - **What's next:** The SEC will review the public comments before voting to revise, adopt, or withdraw the proposed rules. - **Status:** consultation - **Primary source:** [Bitwise, Hyperliquid seek SEC rule changes for token trading, airdrops](https://cointelegraph.com/news/bitwise-hyperliquid-seek-sec-rule-changes-for-token-trading-airdrops?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound) — cointelegraph.com ## Key points - Bitwise requested an objective standard based on publicly available information to assess whether crypto assets fall under US securities laws. - Hyperliquid Policy Center urged the SEC to broaden safe harbor protections to cover token buybacks, airdrops, and secondary decentralized trading. - Critics John Reed Stark and Lee Reiners urged the commission to withdraw the proposal entirely, citing statutory limits and investor protection risks. ## Editorial remark - **Context:** The SEC drafted Regulation Crypto Assets to establish conditional safe harbors and exemptions for digital asset issuance, following joint regulatory initiatives across federal agencies. - **Impact:** Investment managers, decentralized trading venues, and token issuers face continued uncertainty over token classifications and secondary-market liability pending final rule decisions. - **Watch:** The SEC's review of the public docket and any subsequent scheduling of an open commission vote on a revised or final rule package. 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](https://basisdesk.news/news/ripple-prime-hyperliquid-defi-derivatives-integration) 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]. ## FAQ **What is SEC Form TR in the proposed rules?** Form TR is a proposed SEC filing through which an issuer would certify that an investment contract associated with a token has ceased to exist. **Why did critics call for withdrawing Regulation Crypto Assets?** Critics John Reed Stark and Lee Reiners argued the proposal exceeds the SEC's statutory authority, undermines the Howey test, and risks being struck down in court. ## Sources 1. [Bitwise, Hyperliquid seek SEC rule changes for token trading, airdrops](https://cointelegraph.com/news/bitwise-hyperliquid-seek-sec-rule-changes-for-token-trading-airdrops?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound) — cointelegraph.com, 2026-10-20 --- Basis Desk Newsroom · AI-generated, source-verified · https://basisdesk.news/about/how-we-use-ai