Hyperliquid's Policy Arm Wants the SEC to Write Airdrops and Buybacks Into the Rulebook

The Hyperliquid Policy Center filed a comment letter with the SEC on Monday supporting its proposed Regulation Crypto Assets and asking for five revisions before the commission votes. The comment window on docket S7-2026-27 closes today.

The letter, signed by chief executive Jake Chervinsky and senior counsel Brad Bourque, backs the proposal the SEC released in August. That proposal would let qualifying crypto projects raise up to $5 million over as long as four years under a startup exemption, or up to $75 million in any 12-month period under a separate fundraising exemption.

The group's five requests cover:

• Airdrops. Write the SEC's March interpretation into the rule text, so that a free token distribution is not an investment of money when recipients give no tangible, definable consideration. The group argues that connecting a wallet or passing sanctions screening should not count as payment.
• Secondary trading. Use the SEC's authority under Section 36 of the Exchange Act to grant conditional exemptions for qualifying secondary-market activity, including on decentralized platforms.
• Developers. Protect projects that are still building their tokens.
• Buybacks. Separate automated repurchases that run on fixed, published rules from discretionary ones steered by a central party, and adopt a single definition of "central party."
• State law. Make federal preemption of certain state registration requirements permanent, so that projects that qualify for the safe harbor are not exposed to state rules afterward.

The buyback request touches Hyperliquid's own token. The platform uses its trading fees to buy back HYPE, and SEC staff already address the question in a crypto FAQ amended on September 28, which says a buyback announcement is not a promise of managerial effort where the system is functional and has no central party. The group wants that staff position in the final rule, and wants the rule to say what happens when someone can change a buyback's parameters.

Blockhead covered why that matters to valuation in May, when Bitwise's CIO argued HYPE was mispriced because the market was paying roughly 10 to 14 times a buyback stream he put at $800 million to $1 billion a year. A regulatory line between automated and discretionary repurchases bears directly on how that stream gets treated.

The letter follows a pattern Blockhead has tracked as the legislative route narrowed. Hyperliquid's ETF complex lost momentum in August, which Blockhead reported as JPMorgan flagged regulated competition, and the platform has long blocked US users while Wall Street desks traded its weekend derivatives. After the Senate's CLARITY vote failed in September, the SEC and CFTC moved to write rules themselves, which Blockhead covered as the agencies acting unilaterally. The policy center filed a CFTC comment with Phantom in July and met the SEC's Crypto Task Force the same month.

The letter is a set of requests, not rules. After today's deadline the commission weighs the comments before a vote, and SEC Chair Paul Atkins has said legislation is still needed to make the rules durable. For projects deciding whether to launch tokens in the US or abroad, the airdrop and buyback language in the final text will matter more than the dollar caps.