Solana Policy Institute Asks SEC to Define 'Permissionless' Ledgers by Who Controls Validators

The Solana Policy Institute has asked the US Securities and Exchange Commission to define what counts as a "public, permissionless distributed ledger" under its SEC innovation exemption for tokenized securities venues, and to base that definition on who controls a network's transaction ordering and validator set. In a comment letter dated October 22, 2026, filed in SEC File No. 4-927 on Release No. 34-106402, the Washington policy group set out five control-based factors the SEC could publish as guidance or FAQs.

The definition matters because it decides which blockchains can host tokenized US stock trading under the exemption. Two other letters in the same file pull in opposite directions: Hedera wants networks with approved-only validators to qualify, while SIFMA, the Wall Street trade body, has asked the SEC to spell out what makes a network public and permissionless at all.

What the SEC innovation exemption says about permissionless ledgers

The SEC issued the order on September 17, 2026, and we covered the exemption itself that day. It gives tokenized securities venues (TSVs) a five-year conditional exemption from the definition of "exchange" when they trade tokenized NMS stock (shares of US-listed companies) through permissioned automated market maker pools, plus conditional "dealer" relief for liquidity providers in those pools.

One condition is that a venue's smart contracts must be "auditable, public, and deployed on a public, permissionless distributed ledger." The order does not define that phrase. According to the Solana Policy Institute's letter, the only guidance is the SEC's statement that permissionless "generally means that anyone can read or write to the distributed ledger without authorization."

The Solana Policy Institute argues that wording covers access and nothing else. "It does not address who controls whether a submitted transaction is included, how it is ordered, who can validate or finalize blocks, and who can change the rules that govern those functions," the letter says.

The Solana Policy Institute's five-factor control test

The letter, signed by CEO Miller Whitehouse-Levine and General Counsel Patrick Wilson, describes the gap: a network "can be publicly readable and accept transactions from anyone while one entity or selected group of entities retains control over ordinary sequencing or transaction inclusion, or determines who may participate in the network's validator set." Such a chain could pass the SEC's current wording yet, in the group's view, defeat the transparency and resilience goals the condition was written for.

The Solana Policy Institute asks the SEC to publish guidance on how five factors bear on whether a ledger qualifies:

• whether the protocol and its code are fully open source;
• whether anyone can read the ledger and submit valid transactions without individual authorization;
• whether the ledger executes transactions under pre-established, transparent protocol rules;
• whether any person or group under common control holds "persistent or structurally exclusive authority" to sequence or validate transactions, decide which transactions get in, control finality or change the consensus rules;
• whether any such person or group has unilateral power to restrict or censor use, or holds hard-coded privileges that give it preferential treatment.

The test borrows from Congress. The letter points to the Senate Banking Committee's discussion draft of the Digital Asset Market Clarity Act (H.R. 3633, released September 14, 2026), where section 10104 defines a "distributed ledger control person" and section 10301 a "non-decentralized finance trading protocol." The Solana Policy Institute has lobbied on the CLARITY Act before.

The letter also asks for one carve-out. A network should not fail the test "solely because it permits incident-response measures (such as pausing the network or deploying an emergency patch to address a critical vulnerability)," provided those steps are disclosed publicly in advance, temporary and limited, and followed by a post-incident report. The group says this "would preserve an operator's ability to protect investors without permitting ongoing centralized control."

On timing, the Solana Policy Institute says venues are "already developing TSVs and making foundational decisions about the blockchain networks on which they will operate," and those choices "may be costly or difficult to reverse once development is underway."

Hedera's letter: public permissioned networks should qualify

Hedera Hashgraph, LLC filed the opposite request on October 9, 2026. Its letter, signed by Chief Policy Officer Nilmini Rubin and General Counsel Gregory Schneider, describes Hedera as "a public permissioned distributed ledger" whose node operators "must be identified, vetted, and authorized" by up to 39 Council members, including Forbes Global 2000 companies and universities.

Hedera asks the SEC to let TSV smart contracts run on "public distributed ledgers" without separating permissionless from permissioned networks, "in line with the principle of technology neutrality." It also concedes that its public network "would currently satisfy the exemption's definition of 'permissionless'" because that definition only tests access.

That concession frames the dispute. Under today's access-only wording, Hedera says it already qualifies. A control test of the kind the Solana Policy Institute proposes, with its question about who "determines who may participate in the network's validator set," is the version that would put an approved-validator model in doubt. The Solana Policy Institute's letter does not name Hedera, or any chain, and does not argue that any network passes or fails.

SIFMA's broader asks on tokenized stock venues

SIFMA's October 19, 2026 letter, signed by CEO Kenneth E. Bentsen, Jr., is the one the Solana Policy Institute cites for support. Its appendix asks: "Can the SEC further define what characteristics would make a blockchain network public and permissionless?"

That question is one line in a long letter about issuers. SIFMA's main requests are that a third-party tokenized version of a company's stock trade only with the issuer's affirmative opt-in consent, that the objection window run 90 days instead of 30, and that the SEC build a central portal listing venues and their trading volume. SIFMA also notes that several venues "have already published notices and may begin operating within 30 days," calls the five-year term "unusually long," and quotes SEC Chairman Paul Atkins describing the order as "a bridge to durable rulemaking."

Why the permissionless definition matters for Solana validators

The Solana Policy Institute describes itself in the letter as a non-partisan non-profit that educates policymakers on networks "like Solana," and it is a member of Project Open, a group working on tokenized securities on public blockchains. Its interest is direct. In a September 23, 2026 post on Solana.com, Whitehouse-Levine wrote that the institute, Superstate and Orca ORCA$1.79+2.1% presented the venue design to the SEC's Crypto Task Force in April 2025, and that for "a network with a single sequencer, or a validator set chosen by a company, that is a longer conversation with the staff." The October 22 letter asks the SEC to write that reading down.

Stake distribution is one place the control question shows up on Solana SOL$101.26-2.3%. According to Solana Compass validator data, 690 validators were active in epoch 1067 on October 24, 2026, with a Nakamoto coefficient of 18 (the smallest number of validators whose combined stake could halt the network) and the 10 largest holding about 24.6% of roughly 438 million staked SOL. Those figures cover stake concentration only; who may join a validator set, the letter's other question, is a separate test.

What happens next for the SEC tokenized stock exemption

The SEC is taking comments on the order, including, as SIFMA's letter notes, whether the exemption should be made permanent, and has not publicly responded to the three letters. SIFMA's letter welcomes statements by Atkins and Commissioner Mark Uyeda that they expect notice-and-comment rulemaking to follow. The Solana Policy Institute says it may file further comments.