SEC Shouldn’t Treat Network Tokens as Securities, Says Wintermute

Crypto trading firm Wintermute has urged the US Securities and Exchange Commission (SEC) to draw a clear line between financial securities and network tokens, warning that regulatory ambiguity could harm the digital asset ecosystem.

Key Takeaways:

• Wintermute urges the SEC to exclude network tokens like Bitcoin and Ethereum from securities laws.
• The firm warns that misclassifying these tokens risks stifling innovation and could push blockchain activity offshore.
• Wintermute calls for clear rules to support DeFi alongside centralized platforms, emphasizing the need for balanced regulation.

In formal feedback submitted to the SEC, Wintermute argued that “network tokens,” such as Bitcoin and Ether, are integral to the functioning of decentralized networks and should not be regulated under securities laws.

The firm said these tokens act as technical building blocks rather than investment instruments.

Treating network tokens like Bitcoin and Ethereum as securities, Wintermute warned, would misapply existing laws and risk stifling innovation.

“Such misclassification risks stifling innovation and driving blockchain development and trading activity outside of US markets,” Wintermute wrote in its letter.

It added that even if network tokens are later traded for profit or used in fundraising, they still do not meet the legal definition of a security.

Wintermute likened network tokens to assets such as commodities, collectibles, and real estate, goods that may be purchased for speculative purposes but are not inherently securities.

The firm also welcomed SEC guidance that excluded stablecoins, memecoins, and staking services from the securities label, and called for similar treatment of network tokens.

The company further pressed the SEC to create a regulatory environment that allows decentralized finance (DeFi) to grow alongside centralized platforms.

3. We also ask for clarification on the jurisdiction of the SEC

We request that the SEC clarify that network tokens are not securities, which make up most of the market for crypto assets, as it has done for other types of crypto assets

In addition, we seek clarification to…

“Clear guidance across these areas will keep US markets competitive, encourage continued dialogue with regulators, and create optimal conditions for adoption and innovation to thrive,” Wintermute stated.

Wintermute’s comments follow its recent expansion push in the US, including a $112 million acquisition of QCEX, a CFTC-licensed exchange.

The firm appears to be laying the groundwork for deeper engagement in regulated markets, while pushing for frameworks that accommodate decentralized models.

With the SEC continuing to scrutinize crypto markets, Wintermute’s request underscores the industry’s ongoing demand for clarity, before more projects and capital flee to friendlier jurisdictions.

The Trump administration advanced its pro-crypto agenda with a series of policy and regulatory moves.

President Trump signed an executive order urging regulators to remove barriers that prevent 401(k) plans from including alternative assets such as cryptocurrencies.

If implemented, the reforms could allow millions of Americans to allocate retirement funds to Bitcoin and other digital assets through regulated channels.

Trump also nominated economist Stephen Miran, a digital asset advocate, to the Federal Reserve Board of Governors, signaling continuity in his administration’s pro-crypto stance.

In a separate executive order, Trump moved to end “debanking” practices that target lawful crypto firms.

The Blockchain Association praised the measures as a “historic shift” that would expand consumer choice, empower wealth-building, and reduce operational barriers for blockchain businesses.

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