Asset manager Bitwise and the Hyperliquid Policy Center urged the U.S. Securities and Exchange Commission to clarify rules on token classification, airdrops and secondary market trading.

On Oct. 20, blockchain media outlet Cointelegraph reported that the two groups, in separate comment letters submitted ahead of the SEC's deadline for public input on its proposed crypto rules, pointed to a lack of clarity in current regulations.

The issue is the SEC's proposed "crypto asset regulation". The proposal sets exceptions for cryptocurrency fundraising that meets certain requirements and provides a conditional safe harbor for tokens linked to investment contracts. The SEC will review whether to revise, adopt or withdraw the rule after closing the public comment period on Oct. 20. Even if a final rule is prepared, it would require a commission vote before taking effect.

Bitwise called for clear standards so asset managers can determine whether securities laws apply to individual cryptocurrencies based only on publicly available information. It argued the regulation should specify the extent to which market participants can rely on a TR form filed by an issuer confirming the termination of an investment contract, and the criteria for evaluating tokens without such a filing.

The Hyperliquid Policy Center urged an expansion of the safe harbor's scope. It said the current draft would apply only after a project's development is complete. It also called for clarity on the scope of protection for airdrops paid as rewards for network participation and for guidance on token buybacks.

It also pointed to a lack of clarity in trading rules. It said the draft alone makes it hard to know whether token intermediation by unregistered brokers or free trading through on-chain protocols would be allowed. It requested that the regulation specify rules for secondary market trading to resolve regulatory uncertainty for exchanges and decentralised exchanges (DEX).

By contrast, former SEC enforcement official John Reed Stark (존 리드 스타크) and Duke University finance professor Lee Reiners (리 라이너스 듀크대 금융학자) argued in a comment letter submitted on Oct. 16 that the proposal should be withdrawn in full. They said the rule could go beyond the SEC's legal authority and could weaken investor protection.

They said a framework to regulate cryptocurrency issuance is already in place under existing securities laws and lower-court rules from the U.S. Supreme Court. They said fundraising exceptions could weaken investor protection and a conditional safe harbor could let issuers move tokens outside securities regulation based only on self-certification. They also said adopting the rule in its current form could lead to immediate legal disputes.

After the comment period ends, the SEC will review conflicting demands from the industry and legal experts. The central questions are how far it should go in clearly defining the legal nature of tokens, and how airdrops and on-chain secondary trading should be handled within the institutional framework.