The Hyperliquid SEC story got a new chapter this week. On October 19, the Hyperliquid Policy Center filed a comment letter on the SEC’s proposed Regulation Crypto Assets. The letter backs the rule and asks for five fixes. Two of those fixes are about airdrops, which is why I am writing this at all.
Quick background. HPC launched in February with 1 million HYPE from the Hyper Foundation. Jake Chervinsky runs it. The comment window on the SEC proposal closes October 20, so this letter went in right at the buzzer.
What the Hyperliquid SEC letter asks for
In short: HPC wants the SEC to write into law that a free airdrop is not a securities sale, and it wants holders to be able to trade those tokens from day one.
The letter makes five requests. Here they are in plain English.
First, codify the airdrop analysis. The SEC’s March interpretation already said a no-consideration airdrop involves no “investment of money.” That lives in guidance, though, not in rule text. HPC wants it in the rule itself, anchored to whether a recipient gave real consideration.
Second, confirm that claim steps are not payment. Connecting a wallet or clearing a sanctions screen should never turn a free airdrop into a token sale.
Third, settle secondary trading. The proposal does not yet say how onchain protocols can facilitate trades of exempt tokens. HPC points out that the SEC’s own economic analysis admits the benefits shrink without a liquid market.
Fourth, fix the safe harbor. To use it, a project must certify it finished its “essential managerial efforts.” Many teams read that as admitting the token was once a security. HPC wants projects to be able to certify the opposite instead.
Fifth, make state preemption permanent. As written, federal preemption ends the moment a project matures. That exposes a token to registration in 50-plus jurisdictions at the exact point it should be free.
Why airdrop farmers should care
Every “not available in your region” screen you have ever hit comes from the same place: securities fear. I covered that when the SEC first proposed Regulation Crypto Assets in August. The March guidance calmed the fear. Guidance can change with the next SEC chair, however. Rule text cannot.
The claim-step point matters just as much. Almost every modern airdrop asks you to connect a wallet and pass a screening check. If the SEC decided those steps counted as “payment,” then nearly every airdrop would fall outside the safe zone. HPC is asking the agency to shut that door before it opens.
Then there is the trading question. A token you can receive but cannot legally sell is a trophy, not an airdrop. HPC wants the SEC to say out loud that onchain venues can list exempt tokens from the start.
The buyback angle
One more request hides in the letter, and HYPE holders will recognize it fast. HPC wants the SEC to split buybacks into two kinds. Programmatic buybacks run on fixed, published rules. Discretionary buybacks happen when a team decides case by case.
Hyperliquid’s Assistance Fund is the obvious example of the first kind. It buys HYPE automatically with protocol revenue. HPC argues that this type should never count as a promise of managerial effort. The letter also asks the SEC not to treat dispersed validators and users as a controlling “group” just because their incentives line up.
Why I am still farming the Hyperliquid airdrop
Full disclosure: this is not an abstract debate for me. I am still farming Hyperliquid Season 3 every day, and have been since Genesis. The reason is simple. Hyperliquid set aside 38.888% of the HYPE supply for community rewards across several seasons, and Genesis alone paid out 31%. No other project has shipped a drop that size and then kept the program running. Points accrue from spot, perps, HIP-3 markets, vaults and staking, so my normal trading already counts. Even the odd stuff counts, like the PAPER pre-launch perp that went live on a HIP-3 market this weekend. Letters like this one make me more comfortable, not less. If the SEC codifies the airdrop exemption, then Season 3 becomes one of the first big drops that can reach US wallets without a VPN. That is a lot of fresh demand for the same token I am farming.
What happens next
Nothing changes for your wallet this week. The comment period closes, the SEC reads the pile, and a final rule lands sometime in 2027 at best. Meanwhile, Hyperliquid’s own US path still runs through the CFTC, which I covered in is Hyperliquid legal in the US.
Still, direction matters. For a decade the industry begged for rules and got lawsuits. Now the biggest perp DEX in crypto is filing polished comment letters and getting read. Remember that the biggest DEX airdrop ever came from this same project. A world where that kind of drop reaches American wallets without legal gymnastics is the one HPC is lobbying for.
Keep This Content Free
Regulatory letters do not pay the bills, but your referrals do. If this breakdown saved you a trip through 40 pages of legal text, consider opening your next exchange account through our OKX or Bybit links. Same fees for you, and it keeps the daily coverage coming. Prefer onchain? Our Hyperliquid link works too.
Final Words
The Hyperliquid SEC letter is not law, and the SEC can ignore every word of it. Comment letters from well-funded policy shops do move final rules, though, and this one asks for exactly what farmers need: free airdrops stay free, claim steps stay harmless, and tokens trade from day one. I will update this post when the final rule drops. Until then, keep farming, and keep an eye on the latest airdrops while the lawyers argue.
If you want to compare venues before you commit capital, I published Hyperliquid vs edgeX this morning. The regulatory tailwind helps both, but only one has a policy center filing letters in Washington.
Stay sharp out there.
FAQ
What is the Hyperliquid Policy Center?
HPC is an independent research and advocacy group funded with 1 million HYPE from the Hyper Foundation. It launched in February 2026 and is led by Jake Chervinsky.
What did HPC ask the SEC for?
Five changes to Regulation Crypto Assets: codify the airdrop exemption, confirm claim steps are not payment, clarify secondary trading, make the safe harbor usable without admitting past securities status, and make state preemption permanent.
Does the SEC consider airdrops securities?
Not when recipients give nothing in exchange. The SEC’s March 2026 interpretation said no-consideration airdrops lack an “investment of money” under Howey. HPC wants that written into the final rule.
When does the SEC finalize Regulation Crypto Assets?
The comment period closed October 20, 2026. A final rule is expected in 2027 at the earliest.
Does this make Hyperliquid legal in the US?
No. This letter is about token offerings and airdrops. Hyperliquid’s own US access question sits with the CFTC, not the SEC.
