Wintermute, a major crypto market-maker, has formally urged the U.S. Securities and Exchange Commission (SEC) to explicitly clarify that network tokens, like Bitcoin (BTC) and Ethereum (ETH), should not be treated as securities. The request, submitted to the SEC’s Crypto Task Force, highlights the urgent need for regulatory clarity in crypto markets, where uncertainty has slowed innovation and pushed some companies to look for clearer rules abroad.
Wintermute defines these network tokens as “intrinsically connected to the functioning of a decentralized network or protocol,” essential to blockchain operations. This technical role separates them from traditional financial products, the company argues, and exclusion from securities definitions would prevent inappropriate enforcement and preserve market fluidity.
If the SEC were to classify these tokens as securities, every trade in the U.S., even for simple peer-to-peer exchanges, could trigger complex regulatory requirements. That outcome risks higher trading costs, reduced liquidity, and a potential shift of trading activity to overseas markets.
The company also recommends broader reform: clarifying that tokenized securities can be traded in DeFi, settled on-chain, and stored via self-custody tools without automatically triggering broker-dealer regulations, provided that users can verify regulatory thresholds are met.
Wintermute welcomed prior clarity from the SEC regarding stablecoins, meme tokens, and staking. It now calls for the same level of clear guidance for network tokens to uphold U.S. leadership in digital finance while avoiding unintended over-regulation.
The firm emphasizes that well-defined token classifications will foster innovation and regulatory cooperation, rather than stifle them. Clear rules, it argues, would build confidence among investors and regulators alike, keeping the U.S. competitive in shaping the future of blockchain technology
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