The U.S. Securities and Exchange Commission has issued a new no-action letter addressing the distribution of Fuse Energy’s network utility token, concluding that the token as described, does not constitute a security under U.S. law.

Crypto-related no-action letters remain rare, and it has been nearly five years since the SEC issued the last notable token-based NAL (Pocketful of Quarters, 2019). Now, with three crypto NALs issued in one year and two tied directly to decentralized physical infrastructure (dePIN) a pattern is emerging.

Fuse Energy’s letter is not simply another one-off procedural outcome. It signals that the SEC may be increasingly receptive to earned, utility-first token designs that support real-world infrastructure, provided they align with clearly articulated legal guardrails.

Below is a detailed breakdown of the SEC’s reasoning and what this development means for token projects, founders, and the broader Web3 ecosystem.

1. How the Fuse Energy Token Is Structured and Why It Matters

The SEC’s relief hinges on the token’s function, distribution, and economic reality.

According to the letter, the Fuse token is:

• Earned through participation, not sold

Network participants contribute to the buildout of Fuse Energy’s infrastructure and earn tokens as a reward for verifiable activity. There is no public sale, no token presale, and no fundraising event tied to token issuance.

• Distributed through a non-discretionary, formula-based mechanism

The accrual system is mechanical and rules-based. There is no subjective decision-making that could suggest managerial efforts or reliance on the entrepreneurial actions of others.

• Designed solely for consumptive use within the Fuse ecosystem

Tokens grant the right to claim rebates, discounts, and utility access within the FuSe Energy network. Their primary value is functional, not financial or speculative. This mirrors the logic applied in Pocketful of Quarters (2019), where the SEC approved a purely consumptive gaming token that users earned in-platform and spent in-platform.

The Fuse Energy decision extends this framework into a more complex and real-world setting: a decentralized energy network.

2. Applying the Economic Reality Test: Why Fuse Qualified

The SEC’s “economic reality” analysis, grounded in Howey, Forman, and Landreth, examines how a token actually functions in practice.

The SEC highlighted several factors that reduce securities risk:

• The token is not positioned as a speculative asset.

• Earners do not rely on managerial or entrepreneurial efforts for token value.

• All rewards arise directly from network contribution, not investment.

• Tokens are immediately usable for their intended utility purpose.

• The token is tied to consumption, not appreciation.

In short, the SEC views Fuse’s token as a tool, not an investment. This aligns with prior guidance that a digital asset avoids securities classification when:

• The network is functional at the time of token use

• The token is integral to accessing or operating that network

• Users obtain the token primarily to consume, not profit

Fuse Energy appears to have heeded this blueprint closely.

3. A Significant Twist: The Token Will Be Tradable

One of the most interesting features of the Fuse NAL is something we did not see in earlier token decisions:

The Fuse token will be tradable on secondary markets.

This raises questions:

• Doesn’t liquidity invite speculation?

• Doesn’t a market price introduce the possibility of profit?

• Doesn’t that blur the Howey analysis?

The SEC acknowledged these dynamics but allowed them because the project incorporates potential liquidity into its overall design.

Why the SEC was comfortable:

• The token’s core value remains in-network utility, not financial return.

• The token is still earned, not purchased, limiting speculative exposure.

• The project’s marketplace uses third-party market prices as a benchmark for redemption, creating transparency.

• Fuse Energy did not pretend the token would remain isolated from markets.

• The utility does not depend on token price appreciation.

This reflects a subtle but important shift: The SEC is willing to evaluate utility tokens realistically acknowledging liquidity rather than requiring projects to deny it exists.

4. Why dePIN Projects Are Getting More SEC Attention

Two of the three token-related NALs this year involve dePIN networks. This is not a coincidence.

dePIN projects share several characteristics that align with established securities law principles:

1. Real-world infrastructure

Projects in energy, compute, sensors, connectivity, and physical networks anchor token value in actual service delivery rather than market hype.

2. Earned contribution models

Tokens reward verifiable actions, usage, hosting, deploying hardware, maintaining nodes not passive investment.

3. Utility-first design

Tokens enable access, participation, or rewards within the network’s operational stack.

4. Reduced reliance on “efforts of others”

Value emerges from user participation, not managerial performance or tokenomics engineering.

In short, dePIN networks resemble industrial incentive systems more than investment contracts and that seems to resonate with the SEC.

As dePIN grows (Helium, Render, HiveMapper, DIMO, WeatherXM, etc.), this category may become a blueprint for compliant Web3 tokenization.

5. Key Takeaways for Founders, Builders, and Investors

For Founders and Token Designers

• A consumptive, network-integrated token remains the safest path forward

• Earned distribution and objective reward mechanics significantly reduce regulatory risk.

• A transparent acknowledgment of market liquidity is better than pretending it won’t exist.

• Focus on operational utility not token appreciation as the core design principle.

For dePIN Builders

• dePIN is becoming one of the most regulatorily compatible categories in crypto.

• Real-world activity + tokenized incentives = strong alignment with existing legal frameworks.

• The Fuse NAL may serve as a reference model for future infrastructure-token applications.

For Investors

• Liquidity does not automatically create an investment contract.

• Utility tokens tied to infrastructure demand may be treated differently from speculative assets.

• dePIN’s regulatory trajectory may position it as a foundational Web3 sector rather than a niche.

Conclusion

The SEC’s no-action letter for Fuse Energy marks an important moment for utility tokens and the expanding dePIN ecosystem. While regulators remain cautious about speculative digital assets, they are increasingly open to tokens that:

• Are earned through participation,

• Provide real utility,

• Exist inside functional networks, and

• Reflect economic reality, not financial engineering.

If this trajectory continues, we may see a clearer, more stable regulatory path for utility-focused crypto networks, especially those that tie blockchain to physical infrastructure and real-world activity.

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