Trading firm Wintermute has formally called on the U.S. Securities and Exchange Commission (SEC) to clarify that network tokens such as Bitcoin and Ether should not be classified as securities. This appeal was made in response to the SEC’s request for industry feedback on digital asset regulation.
Call for Clear Guidance
Wintermute argued that 'network tokens,' which are essential to the operation of decentralized networks, differ fundamentally from financial products. The firm stressed that these tokens are technical inputs, not investment contracts, and therefore fall outside the scope of securities laws.
Distinction from Securities
The firm warned that classifying Bitcoin and Ether as securities could lead to severe consequences for the U.S. crypto market. Such a move would trigger burdensome compliance requirements for every token transaction, reduce liquidity, increase costs, and drive blockchain innovation offshore. Wintermute stated, 'Misclassification risks stifling innovation and pushing development outside the United States.'
Support for DeFi and Centralized Markets
In addition to network tokens, Wintermute urged the SEC to adopt policies that allow decentralized finance (DeFi) to grow alongside centralized markets for tokenized securities. Supporting both avenues, the company argued, would expand investor options, foster innovation, and strengthen the U.S. position in global markets.
Wintermute's appeal to the SEC highlights the importance of clear regulation for network tokens to maintain the United States' competitiveness in the global crypto economy.
