No-action relief refers to a formal communication from a regulatory agency indicating that it will not recommend enforcement action against a specific entity for engaging in a particular activity. In the context of digital assets, companies may seek no-action relief from securities regulators to proceed with an offering or operation without fear of immediate legal repercussions. This administrative mechanism provides a degree of regulatory clarity in areas where specific rules for novel technologies are still developing. It represents a temporary or specific assurance rather than a broad legal precedent.
Context
The availability and scope of no-action relief are significant topics in the digital asset industry, particularly for projects seeking to launch new tokens or platforms. While it offers a pathway for specific entities to operate, critics argue it provides insufficient general guidance for the broader market. Regulators are considering whether to issue more comprehensive guidance or new regulations to address the complex legal questions surrounding digital assets, potentially reducing the reliance on individual no-action letters.
The staff's targeted no-action relief establishes a critical functional utility test for network tokens, de-risking infrastructure-focused issuance models.
This staff relief operationalizes crypto custody for RIAs and RICs, formalizing state-chartered trust companies as qualified custodians under the Custody Rule.
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