Miami – September 29, 2025 – Cooley advised DoubleZero Foundation, which secured a first-of-its kind no action letter (NAL) from the Securities and Exchange Commission’s Division of Corporation Finance, which clarifies that the programmatic distributions of 2Z tokens are not subject to registration under the Securities acts. This represents a major milestone in the regulation of crypto assets and provides a potential path for crypto projects to compliantly distribute tokens in the US.

DoubleZero is a Cayman Islands foundation company formed to support the development, decentralization, security and adoption of the DoubleZero network – a new, purpose-built internet optimized for distributed systems, like blockchains. The 2Z token is a Solana-based token that incentivizes distributed actors to contribute to the DoubleZero network. It supports three programmatic flows: user payments (fees paid to use the network); provider payments (programmatic distributions of the user fees to network providers who supply fiber capacity to the DoubleZero network); and computation payments (new 2Z emissions used to reward resource providers for protocol computations).

The NAL clarifies that the programmatic distributions of 2Z tokens pursuant to provider payments and computation payments are not securities transactions under the Securities Act Section 5 or Exchange Act Section 12(g) because they do not meet the fourth element of the Howey test, given that any “profit” to network or resource providers flows from their own significant operational efforts, not the entrepreneurial/managerial efforts of a promoter. This is the first NAL granted by the SEC to a crypto project since 2020 and the most significant crypto NAL to date because it provides a framework that other projects can follow.

Lawyers Derek Colla, Rodrigo Seira and Connor Tweardy led the Cooley team advising DoubleZero.

Read DoubleZero’s NAL request

Read the SEC’s response letter

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