No-Action Letters: What They Are and Why They’re Important for Crypto Builders

Since the Securities and Exchange Commission (SEC) announced its Crypto Task Force and signaled it was open to productive conversations with the crypto industry, interest in no-action letters has surged across the digital-assets community. In recent remarks titled “American Leadership in the Digital Finance Revolution,” SEC Chair Paul Atkins called for modernization of on-chain markets and encouraged innovators to proactively engage with SEC staff for clarity on token regulation. His remarks echoed Commissioner Hester Peirce’s February 4, 2025 statement, “The Journey Begins,” in which she highlighted the SEC’s Crypto Task Force goals and actively encouraged no-action submissions as a way to draw clearer regulatory lines and reduce uncertainty. Both Chair Atkins and Commissioner Peirce emphasized that staff input and tailored exemptions can act as a bridge to builders in the industry while comprehensive rules are developed.

For crypto projects—especially those considering token sales, staking programs, or tokenized equity offerings—no-action letters can clarify how existing rules apply and reduce the immediate risk of enforcement. The crypto community’s interest in such relief mirrors long-standing practice in traditional finance, where financial institutions seek guidance from the SEC in order to test novel products, business models, and compliance approaches. In both contexts, a well-crafted request for no-action relief can secure valuable insight into how regulators view a proposed activity, allowing a project to proceed with far greater legal certainty.

Potential Agency Relief and No-Action Letters

Regulators can issue several forms of informal guidance. Interpretive letters explain how staff applies or interprets a rule to a given fact pattern. Exemptive letters grant waivers from statutory or regulatory provisions, usually with conditions. No-action letters state that, based on the precise facts presented, the regulator’s staff will not recommend enforcement action against the requesting party regarding the specified conduct. A staff guidance letter is a general statement of the agency’s current thinking, providing non-binding advice to help market participants understand how the regulator is likely to approach a particular issue.

A no-action request is typically a detailed, fact-rich submission describing the proposed conduct, relevant legal arguments, and supporting materials. The resulting letter from the regulator is not a binding order, but reflects the enforcement position of the staff that issued it—not the agency’s commissioners, other divisions, or any court. The assurance applies only if the actual conduct matches the described facts; even minor deviations can void its protection. 

No-action letters are common across regulatory domains. To take the SEC as an example, during the 2024 U.S. proxy season, companies submitted about 50% more no-action requests to exclude shareholder proposals, with staff granting more than 66% of requests —up from 56% in 2023. Early 2025 figures show a similar 69% success rate, suggesting that a well-crafted request aligned with staff expectations can be successful. But companies also submit requests to other regulators; for example, in environmental law, a firm may ask the EPA whether a new waste-disposal process would trigger penalties. These letters help clarify legal standing and reduce the risk of costly enforcement surprises before launch. Although no-action letters are issued in response to a specific request, regulators publish them (often with staff commentary) so that market participants can better understand the agency’s reasoning and the fact patterns that matter in legal analysis.

Most federal agencies—including the CFTC, SEC, OCC, and FinCEN—accept requests for no-action relief through multiple channels, often offering an online submission portal in addition to mail or other approved methods. State regulators also receive and review no-action requests in areas such as securities, insurance, and environmental compliance, though their procedures for receiving, reviewing, and interpreting such requests vary widely.

Benefits and Limitations

A well-prepared no-action request can provide several important advantages. It can clarify whether a proposed course of conduct is likely to trigger enforcement, reduce both legal and investor uncertainty, and accelerate innovation by allowing a project to move forward while regulatory rules continue to evolve. For many builders, that combination of clarity and momentum can be critical in navigating complex, overlapping regulatory regimes. Further, the public nature of agency-issued no-action relief can help push the ball forward by offering a practical waypoint and litmus test for other firms in the industry.

However, no-action letters are far from a blanket shield. Their scope is confined to the specific facts described in the request, and the relief may not apply if those facts change or if any conditions attached to the letter are breached. They represent nonbinding opinions of regulatory staff, not the formal position of the agency as a whole. Courts may view them as persuasive but will not treat them as controlling authority.

Preparing a persuasive request requires detailed factual development, robust legal analysis, and careful alignment with the regulator’s procedures, which can differ significantly between agencies—and, for state regulators, from one jurisdiction to another. Moreover, staff positions can evolve over time. Agencies sometimes modify or withdraw previously issued letters when policy priorities shift—for example, in 2018, the U.S. Securities and Exchange Commission explicitly rescinded no-action letters, underscoring how such guidance may change as circumstances evolve. The process of securing no-action relief typically takes several months and often involves multiple rounds of written submissions and oral discussions with agency staff. 

Examples of No Action Relief Already Granted

TurnKey Jet – 2019 – Token Utility & Securities Law

In 2019, the SEC’s Division of Corporation Finance issued its first crypto no-action letter to TurnKey Jet, Inc., approving the sale of tokenized “jet credits” without treating them as securities. The staff emphasized that the tokens were usable only within a closed flight platform, sold at a fixed price, and not marketed for profit. For crypto builders, it showed how tokens with genuine utility can avoid securities status—a precedent still relevant to token launches and SAFTs.

Two Ocean Trust – 2020 – Custody of Crypto

In 2020, the Wyoming Division of Banking issued no-action relief to Two Ocean Trust, a state-chartered public trust company. The letter confirmed that Two Ocean could custody cryptocurrencies and tokenized securities under Wyoming law, and recognized it as a “qualified custodian” under the SEC’s custody rule. This created a state-level pathway for compliant digital-asset custody, paving the way for institutional adoption of stablecoins and tokenized equity.

Closed-End Funds – 2024 – Routine Governance in TradFi

During the 2024 proxy season, the SEC’s Division of Investment Management granted no-action relief to several closed-end funds, allowing them to exclude activist proposals to declassify their boards under Rule 14a-8. While unrelated to crypto, it highlights how no-action letters are a standard governance tool in traditional finance, used regularly to manage shareholder disputes. The lesson for crypto: no-action letters are also mainstream regulatory instruments.

Rule 506(c) Verification – 2025 – Lowering Fundraising Cost

In March 2025, SEC staff clarified that issuers using Rule 506(c) could verify accredited investor status through minimum investment thresholds ($200,000 for individuals, $1 million for entities) plus signed representations, instead of demanding tax returns or bank records. For token projects, this reduces compliance friction in SAFTs and private token sales, aligning crypto fundraising with long-standing private equity and venture practices.

Conclusion

No-action letters are one of the most pragmatic tools for navigating regulatory uncertainty in crypto. They provide a window into regulators’ thinking and, when granted, can allow projects to proceed with greater confidence. As digital-asset regulation gains momentum and success rates in certain areas rise, demand for no-action letters is likely to grow. 

The following blog post was authored by Tyler Rihn, a legal intern with the DeFi Education Fund.