The Hyperliquid Policy Center (HPC) has submitted formal comments to the U.S. Securities and Exchange Commission on the proposed Regulation Crypto Assets, asking the agency to refine rules for token airdrops, programmatic buybacks, secondary trading, the safe harbor and state preemption.
The comment letter was filed on October 19, 2026 under SEC file number S7-2026-27 and was signed by HPC chief executive Jake Chervinsky and senior counsel Brad Bourque. HPC launched in February with 1 million HYPE from the Hyper Foundation, which supports the Hyperliquid ecosystem, and describes itself as an independent research and advocacy group.
The SEC proposed the rule in August. It would allow token offerings of up to $5 million over four years under a startup exemption and up to $75 million in any 12-month period under a fundraising exemption. It would also add a safe harbor confirming when a token is no longer tied to an investment contract and preempt state registration for those offerings and certain resales.
In its letter, HPC supports the proposal but wants changes before adoption. A key request concerns buybacks. HPC asks the SEC to confirm that announcing, maintaining or executing a programmatic buyback or burn on a functional system is not a promise of essential managerial efforts, even if a central party exists. Programmatic buybacks would run on fixed, publicly disclosed parameters such as a set share of protocol fees, a defined schedule, a formula or continuous open-market buying that anyone can verify onchain.
By contrast, HPC says discretionary buybacks run by a central party may be considered a promise of managerial effort, especially when marketed as yield or when the network is not yet functional. The letter also asks the SEC to narrow its definition of a central party, arguing that loose language could cover any network with a governance token.
Hyperliquid already operates a buyback model that resembles HPC's programmatic definition. Its Assistance Fund receives most of the exchange's trading fees and uses them to buy HYPE on the open market. According to CoinShares research, the fund places orders below market price and sends purchased tokens to an address no one can access. Validators voted in December 2025 to recognize those tokens as burned. The letter does not mention Hyperliquid specifically.
HPC's other requests include clarifying that tokens earned by using a network, running a validator or supplying liquidity involve no investment of money where the recipient gave no tangible consideration. It also asks the SEC to state that resales of these tokens are not securities transactions and to use its exemptive authority so intermediaries and qualifying onchain protocols can facilitate trades without registering as exchanges, brokers or dealers. On the safe harbor, HPC wants projects to be able to certify that their token was never subject to an investment contract without that filing being treated as an admission. It also proposes an optional annual certification to keep federal preemption protection in place after a project satisfies the safe harbor.
The SEC will consider public comments before voting on a final rule. None of the requests has legal effect unless the SEC includes it in the final rule or the adopting release. HPC said it will continue engaging with the agency and its staff.
