Things had gotten a little quiet on the crypto front over the holidays, but now Corp Fin kicked off 2026 with a new no-action letter to an entity called MegPrime Holding LLC. The incoming letter describes the token that is the subject of the no-action relief as follows:

MegPrime Holding LLC is offering the MegPrime token as a tokenized reward solution intended to address the monthly household budget affordability needs of its users, which have increased in recent years. The rewards program will be built around the MegPrime token, which will be marketed as a crypto asset that users can spend in their day-to-day purchases and receive digital rewards in two different forms: (1) rewards in the form of additional MegPrime tokens and (2) points that represent, on a 1-to-1 basis, the amount of dollars spent with the MegPrime tokens (the “Rewards Program”). If users do not spend the MegPrime token with a merchant in a commercial transaction, they will not receive any rewards. MegPrime Holding LLC will sponsor the MegPrime token and manage the Rewards Program, with Megatel, including marketing the program and funding the associated rewards.

The incoming letter points out that “the MegPrime tokens represent a right or interest to receive consumption rewards offered by MegPrime Holding LLC based on the dollar amount of tokens a user spends, similar to how credit card rewards and points are created and used, based on a consumer’s level of spending.” Based on this structure, it is argued that the MegPrime tokens are not “investment contracts” under the Howey test and therefore are not securities for the purposes of the Securities Act or the Exchange Act. In response, the Division noted that it would not recommend enforcement action if the MegPrime tokens were offered and sold without registration under the Securities Act or the Exchange Act.

– Dave Lynn