Hyperliquid Policy Center Asks the SEC for Five Changes Before Tuesday

One day before the comment window shuts, the Hyperliquid Policy Center filed a letter asking the US Securities and Exchange Commission to redraw five parts of its proposed crypto rule. The group backs the framework. It wants the drafting changed. The rule is Regulation Crypto Assets, File No. S7-2026-27, published in the Federal Register on 21 August 2026 with a comment deadline of 20 October. It would create two registration exemptions, a conditional safe harbor from the term "investment contract" and a preemption of certain state registration requirements. Four outlets carried the filing on Monday within about 80 minutes of each other.

The five requests

Read against the proposal, each ask points at a specific subpart.

Write the Commission's existing airdrop analysis into the rule text, so that free distributions are not automatically securities transactions, and so that connecting a wallet or passing sanctions screening does not count as paying for a token.
Say plainly whether tokens sold under the exemptions can later be resold through decentralised protocols and unregistered intermediaries. crypto.news notes the group cites the Commission's own economic analysis, which flags limited secondary liquidity.
Let a project certify that its token was never tied to an investment contract without that certification reading as an admission that it once was, and let the safe harbor cover projects whose essential managerial work is still underway. The current draft applies it only once that work is finished or permanently abandoned.
Separate buybacks that run automatically under published protocol rules from buybacks a central operator chooses to make, and stop treating dispersed validators as one controlling group merely because their incentives align.
Keep the federal preemption of certain state registration requirements in force after a project clears the safe harbor.

The buyback ask has a paper trail

This is the request with the most history behind it. Commission staff published guidance on 28 September putting token buybacks and network upgrades outside the Howey test, and the letter asks for that guidance to be folded into the final rule instead of left in an FAQ. Coindoo reports the group wants "central party" defined as two or more persons acting in concert or under common control, borrowing the standard from Section 13(d) of the Exchange Act, and wants Section 36 exemptive authority used to let onchain protocols facilitate resales without registering. Both statutory anchors stand unverified elsewhere. Hyperliquid itself is the largest venue of its kind by open position, with open interest that passed $18 billion earlier this year.

Whose March interpretation

The accounts do not agree on the provenance of the airdrop material the letter wants codified. crypto.news describes it as a joint SEC and CFTC interpretation from March 2026 covering airdrops, staking and related activities. Crypto Economy, writing an hour later, calls the same thing the SEC's own March analysis and does not mention the CFTC at all. We could not establish which document the group is pointing to. The terminology splits too: crypto.news, The Cryptonomist and Coindoo all report the letter asking for consistent use of "central party", while TechFlow's English edition reports it as "core entities". TechFlow renders one sentence of the letter directly, and no other account carries it.

"Airdropped assets without substantial and explicit consideration do not constitute investment contracts," the letter said, in the passage TechFlow quoted.

Tuesday closes the window, not the question

None of this is adopted. The exemptions would cap offerings at $5 million over four years in one case and $75 million in any 12-month period in the other. The Commission has not voted on either, and no adoption timetable has been published. Coindoo names Jake Chervinsky, the group's chief executive, and senior counsel Brad Bourque as the signatories, which no other account confirms. The group was set up in February with a grant of 1 million HYPE from the Hyper Foundation; the dollar values reported for that grant, about $28 million in one account and $29 million in several others, do not reconcile, and the token figure is the one every account agrees on. After Tuesday the file closes and the drafting moves out of public view.