SEC Clears Fuse Crypto’s Energy Token: Not a Security, No Action

The SEC issued a no-action letter to Fuse Crypto, confirming its energy rewards token is not a security. The token is earned for sustainable actions and used within the network, not sold for profit.

The U.S. Securities and Exchange Commission (SEC) has issued a no-action letter to Fuse Crypto Limited, confirming that its native token, used to reward participation in sustainable energy initiatives, is not considered a security. The SEC's Division of Corporation Finance stated it would not recommend enforcement action if Fuse offers and sells its token as described, emphasizing that the token is earned for utility within the network rather than for investment purposes. The token is not sold to the public but is distributed as compensation for activities like installing rooftop solar or reducing energy consumption, and its value is tied to its usefulness, such as discounts on energy bills or access to upgrades. The SEC's decision, based on the facts presented by Fuse, clarifies that the token does not meet the criteria of an investment contract under the Howey Test, as users do not expect profits from the efforts of others. This move is seen as a significant step for the DePIN sector, providing regulatory clarity for blockchain-based tokens managing real-world infrastructure.