The Securities and Exchange Commission’s Division of Corporation Finance has issued a no-action letter to Fuse Crypto Limited, granting the company relief related to its FUSE token, which rewards customers for participating in electricity-sustainability programs.
The unit said it would not recommend an enforcement action to the full commission if Fuse offers and sells its token. Last week, the energy technology startup asked the SEC to confirm that Fuse tokens are not securities.
"This position is based on the representations made to the Division in your letter," the SEC's Division of Corporation Finance said in a statement on Monday. "Any different facts or conditions might require the Division to reach a different conclusion."
This marks the second token-related no-action letter in recent months. In September, the agency issued a letter to DePIN project DoubleZero regarding its distribution of 2Z token.
The SEC has taken a friendlier approach to the digital asset industry over the past year under the Trump administration. The agency has since hosted crypto roundtables, dropped investigations into crypto firms, and embarked on "Project Crypto" to update its rules for digital assets. Earlier this month, SEC Chair Paul Atkins also unveiled plans for a "token taxonomy" to delineate between what cryptocurrencies would be securities.
Fuse operates electricity businesses in the U.S. and installs electric vehicle chargers, rooftop solar, and other green tech devices. In its Nov. 19 letter, the firm said it uses blockchain technology to help "decongest the electricity grid." Fuse's customers can earn FUSE tokens by installing rooftop setups.
"The rollout of additional decentralized energy generation and smart grid technologies creates a growing need for incentives that drive intelligent energy usage," Fuse said in the letter. "The Tokens align with this trend by offering a flexible, scalable consumptive rewards system that benefits both users and the energy infrastructure."
Fuse said it didn't believe that its token should be considered a security because it is not an investment contract. The SEC has often relied on the Howey test, which is based on a 1946 U.S. Supreme Court case, to determine if an asset qualifies as an investment contract and, therefore, a security.
"In particular, we conclude that the Token is not an investment contract, and consequently not a security, because consumers will earn Tokens for their own consumption and not based on a reasonable expectation of profit from the efforts of Fuse or others," the group said in its letter.
