Hyperliquid Policy Center Submits Five SEC Recommendations on Airdrops and Buybacks

The Hyperliquid Policy Center filed five formal recommendations with the Securities and Exchange Commission on Monday, pressing the regulator to clarify its proposed framework on token airdrops, automated buybacks, secondary trading, and legal protections for developers.

The submission targets specific gaps in the SEC's evolving approach to digital asset classification and market structure. On airdrops, the policy center seeks explicit guidance on whether token distributions to existing holders or community members trigger securities registration requirements. On buybacks, the concern is whether automated on-chain repurchase programs, common in decentralized finance protocols, constitute market manipulation under existing rules. Secondary trading and developer liability complete the five areas, with the center arguing that ambiguity on each point creates legal exposure that pushes builders and capital toward offshore jurisdictions.

Without workable rules, the policy center contends, US-based developers face a structural disadvantage: they either operate in a legal grey zone or restructure offshore to avoid SEC scrutiny entirely. The submission frames regulatory clarity not as a concession to industry, but as a prerequisite for keeping innovation onshore. Clarifying these rules "could boost US innovation, prevent talent drain, and ensure regulatory consistency across states and markets," the center stated.

That framing will face pushback. The SEC has historically resisted issuing blanket exemptions or safe harbors for crypto-specific activities, citing investor protection concerns and the risk that clear rules on buybacks, in particular, could be exploited for price manipulation. Critics of industry-led policy bodies also argue that submissions like this one represent the interests of established protocols rather than the broader retail investor base the SEC is mandated to protect. The counter-argument that existing securities law already covers these scenarios, making crypto-specific guidance redundant, remains a live position inside the agency.

The submission lands at a moment when the SEC is under pressure to produce a coherent framework rather than rely on enforcement actions as de facto rulemaking. The commission's proposed regulatory approach to crypto assets has drawn sustained criticism from both industry and some lawmakers for leaving too many operational questions unanswered. The Hyperliquid Policy Center is one of several project-affiliated advocacy bodies that have moved into the space traditionally occupied by trade associations, filing comment letters and regulatory recommendations directly with federal agencies. This pattern of engagement, seeking precision on specific mechanisms rather than opposing regulation wholesale, reflects a strategic shift in how crypto projects interact with Washington.

State-level securities regulators have taken divergent positions on several of the same questions the SEC has left open, creating a patchwork that compounds compliance costs for projects operating nationally. A federal clarification from the SEC would, in theory, preempt that fragmentation. The same dynamic is playing out internationally: France passed a 31.4% capital gains tax on stablecoin swaps by a single legislative vote earlier this year, illustrating how quickly jurisdictions are locking in positions on digital asset treatment without waiting for a global standard.

The SEC has not publicly responded to the submission as of Monday. The agency typically has no fixed timeline for acting on policy recommendations filed outside formal notice-and-comment rulemaking periods. Whether these five recommendations move from filing to formal guidance will depend as much on the commission's internal rulemaking calendar as on the persuasiveness of the arguments themselves.