The U.S. Securities and Exchange Commission (SEC) has issued a no-action letter to Fuse Crypto Limited, allowing the company to move forward with its FUSE token offering. This decision follows Fuse’s request for confirmation that its token, which rewards users for participating in electricity-sustainability programs, would not be classified as a security.
Fuse’s Argument Against Security Classification
In its letter, Fuse argued that the FUSE token should not be considered a security because it does not meet the criteria of an investment contract, as defined by the SEC’s Howey test. The company stated that customers earn tokens based on their own consumption of energy-efficient products, rather than expecting profits from the efforts of Fuse or others.
The SEC confirmed that, based on these facts, it would not recommend enforcement action if Fuse proceeds with its offering. However, the SEC warned that any change in facts or conditions could lead to a different conclusion. This letter marks the second no-action letter related to tokens issued by the SEC in recent months, with a similar letter granted to DePIN project DoubleZero in September.
Fuse’s Sustainability Mission and Token Offering
Fuse operates in the U.S. energy sector, focusing on installing electric vehicle chargers, rooftop solar systems, and other green technologies. The company uses blockchain technology to help improve grid efficiency and provide incentives for customers who adopt sustainable energy practices.
Through the FUSE token, customers who install rooftop solar panels and engage in energy-saving initiatives can earn rewards, further promoting a decentralized energy model.
SEC’s Evolving Stance on Digital Assets
The SEC’s decision to issue a no-action letter is part of a broader trend towards a more flexible regulatory approach to digital assets. Over the past year, the SEC has initiated “Project Crypto” to reassess its rules for blockchain technologies and digital assets. Under the leadership of SEC Chair Paul Atkins, the agency has shown increasing openness to projects that promote sustainability and innovation in the crypto space, signaling a more accommodating future for token offerings.