Wintermute Trading, a leading crypto market-maker with over $6 Trillion in historical trading volume, has urged the SEC to treat network tokens as network infrastructure rather than securities.
In a September 3, 2025 submission to the SEC’s Crypto Task Force, the firm argued that tokens like Bitcoin and Ether “enable a blockchain network to operate” by powering consensus and “make up the vast majority of digital asset market capitalization.”
It warned that classifying these assets as securities would impose securities-law compliance on every trade, raise costs for market makers, and “stifl[e] innovation and driv[e] blockchain development … outside of US markets,” effectively pushing trading offshore.
Wintermute likened these network tokens to commodities or real estate – assets people buy for investment but that are not regulated as stocks.
Wintermute’s SEC Submission
Wintermute’s feedback was filed in response to SEC Commissioner Hester Peirce’s tokenization request-for-comment.
The London-registered firm noted that it provides liquidity on more than 50 crypto exchanges and has traded over $6 trillion in volume, underscoring its role as a major market maker.
In its cover letter, Wintermute said it had avoided opening a U.S. office due to an “arbitrary and capricious” enforcement regime and “incredibly unclear” rules on crypto trading in the U.S.
The submission aims to help define practical rules for tokenized securities markets. Wintermute urged the SEC to clarify that its own account trading, custody, and DeFi activities, like pooling or lending, need not trigger full broker-dealer rules, and to spell out when and how on-chain settlement with stablecoins is permitted.
Crucially, Wintermute’s letter includes a section on “Security Status.” Citing recent SEC staff guidance that meme coins, stablecoins, and staking are not securities, Wintermute urged the agency to explicitly extend that clarity to network tokens.
It defined a network token as one “intrinsically connected to the functioning of a decentralized network or protocol,” such as BTC or ETH.
The letter states flatly: network tokens are technically inputs for blockchains, not equity claims on a company, so “in a practical sense, [a network token] is not a security or financial product.”
Legally, Wintermute argued these tokens fail the Howey test: they were often sold to fund protocols, and later traded, but without the managerial oversight or expected profits that define an investment contract.
Network Tokens vs. Securities
Wintermute stressed that network tokens should be treated like digital commodities. The company noted that Bitcoin, Ether, and similar tokens are used by developers to secure and run blockchains, not to raise profit for initial investors.
It pointed out that many assets – from gold and real estate to art and collectibles – are bought and sold speculatively without being classed as securities.
Likewise, people trade network tokens for investment or utility, but that speculative activity alone does not make the token a security.
If the SEC were to declare network tokens as securities, Wintermute said, every trade might require SEC-regulated procedures.
It wrote that would “affect the liquidity” of Bitcoin, Ether, and other network tokens, driving up costs and “ultimately push[ing] activities offshore.”
The letter warns that such misclassification “risks stifling innovation and driving … trading activity outside of U.S. markets.”
Without clear guidance, the SEC’s enforcement actions, such as a recent suit against Cumberland DRW, later dismissed, have left liquidity providers wary.
Wintermute wrote that network tokens “make up most of the market” for crypto assets, so over-regulating them would risk pushing the bulk of crypto trading to jurisdictions with friendlier rules.
It urged the SEC to issue unambiguous statements protecting decentralized trading. For example, Wintermute said the agency should clarify that simply providing liquidity or trading on decentralized finance (DeFi) platforms does not by itself require broker-dealer registration or invoke U.S. jurisdiction.
