Fuse Crypto Limited Gains Regulatory Advantage
Fuse Crypto Limited, a company specializing in energy technology and operating distributed energy initiatives across both the United States and Europe, has received a significant advantage in the regulatory landscape. On Monday, the U.S. Securities and Exchange Commission (SEC) announced that it would not take enforcement action against Fuse concerning its proposed ENERGY rewards token.
SEC’s No-Action Decision
This decision came in response to a no-action request filed by Fuse on November 19, in which the SEC’s Division of Corporation Finance indicated that it would not raise objections to the company’s plan to offer and sell the ENERGY token without requiring registration, as long as it complies with the described framework in its submission.
The SEC’s announcement serves as a pivotal moment, distinguishing this loyalty-based digital token from traditional investment products.
The regulatory body made it clear that its position relies on Fuse adhering strictly to their outlined token structure. In a public statement via the social network X, Fuse expressed pride in their engagement with the SEC, highlighting their contribution to the ongoing dialogue aimed at enhancing regulatory clarity in the cryptocurrency sector in the United States, stating, “The momentum is building.”
Design and Functionality of the ENERGY Token
The design of the ENERGY token, which operates on the Solana blockchain, is intended to reduce speculation—its redemption value is capped by the profit margins and is directly related to the average market price at the time of consumer use. This token system rewards households for participating in distributed energy resource initiatives, encompassing installations such as rooftop solar panels and electric vehicle chargers.
Fuse has argued that the ENERGY token operates more as a rebate mechanism for consumers who engage in energy-saving practices, rather than functioning as a speculative investment tied to the performance of the company itself. The SEC’s staff affirmed that the token’s valuation would not hinge on the success of either Fuse or the Fuse Network, which is a vital aspect of the Howey test determining whether an asset is classified as a security.
Expert Opinions on the SEC’s Decision
Legal experts, including Bill Hughes from ConsenSys, have voiced support for the SEC’s decision, noting that the factors cited by the SEC made the ruling an apparent conclusion. Hughes remarked on X that, ‘There is not a lawyer in crypto that would have thought this token was a security,’ deeming it an ‘easy case.’
As of now, representatives of Fuse have not commented on the matter in response to inquiries from Decrypt.
