2Z Token Tanks Despite SEC Green Light, Sparking Backlash Over Tokenomics

DoubleZero’s 2Z token has faced a sharp sell-off despite a regulatory boost from the U.S. Securities and Exchange Commission (SEC). The token plunged 40% shortly after its listing, raising fresh concerns about insider allocations and unclear token supply data.

The crash followed news that the SEC issued a rare No-Action Letter for DoubleZero (2Z) — a milestone many saw as a sign of regulatory openness toward blockchain infrastructure projects. However, investors and the crypto community quickly shifted focus to the project’s controversial tokenomics and distribution plan.

SEC Approval Fails to Restore Confidence

In late September 2025, the SEC granted DoubleZero a No-Action Letter confirming no immediate enforcement action over its token distribution model. Industry observers initially viewed this as a positive regulatory signal for the platform, which aims to improve blockchain data transmission using dedicated fiber-optic infrastructure and token incentives for bandwidth providers.

Despite this, 2Z’s price collapsed soon after listing. The token traded at $0.53501 at the time of reporting, down 40% from its early peak. Market data shows a surge of unlocked tokens and insider transfers to major exchanges, fueling a wave of selling pressure. Jump Crypto reportedly moved more than $20 million worth of 2Z tokens to exchanges, triggering fear among retail traders.

Community Backlash Over Tokenomics

Criticism centers on the project’s token allocation and initial circulating supply. While the whitepaper previously suggested only 7% (700 million 2Z) would be circulating at launch, on-chain data revealed a much higher 3.47 billion tokens (34.7% of total supply). This discrepancy has caused confusion and anger online.

The tokenomics breakdown shows significant insider ownership: Foundation & Ecosystem ~29%, Jump Crypto ~28%, Malbec Labs ~14%, Team ~10%, with limited direct allocation to the community. Critics argue this imbalance undermines decentralization and increases dumping risk.

Arkham data further revealed that Jump Crypto deposited large amounts of unlocked 2Z to Binance and Bybit shortly after trading began. This move, combined with early access for insiders, is seen as a major contributor to the price decline and eroding retail confidence.

What It Means for the Project’s Future

While DoubleZero’s technology remains promising and its regulatory recognition is a positive sign for blockchain infrastructure, trust issues over tokenomics may overshadow technical progress. Analysts say transparent supply data, fairer distribution models, and better vesting communication could help rebuild confidence. Until then, volatility and community backlash are likely to continue affecting 2Z’s market performance.

The 2Z case highlights how regulatory wins alone cannot guarantee investor trust. Tokenomics transparency and fair allocation remain critical for any crypto project seeking long-term success.

FYI (keeping you in the loop)-

Q1: What is DoubleZero (2Z)?

DoubleZero is a blockchain infrastructure project aiming to improve data speed and bandwidth using a tokenized network model.

Q2: Why did 2Z’s price crash after SEC approval?

Large insider token unlocks and unclear supply data caused selling pressure despite regulatory recognition.

Q3: Who owns most of the 2Z tokens?

Foundation & Ecosystem, Jump Crypto, Malbec Labs, and the core team hold the majority, with limited community allocation.

Q4: Does the SEC No-Action Letter mean 2Z is risk-free?

No. It only means no immediate enforcement action. It does not guarantee price stability or investor protection.

Q5: What should investors consider before buying 2Z?

Research tokenomics, vesting schedules, and insider holdings. Only invest what you can afford to lose.

⚠️ Strict Crypto Disclaimer

The information in this article about DoubleZero (2Z) and other digital assets is strictly for informational purposes only. It does not constitute financial, investment, trading, or legal advice. Cryptocurrencies, including 2Z, are highly volatile and risky, and prices can fluctuate sharply, resulting in possible loss of your entire investment.

Readers should do their own research and consult a qualified financial advisor before making investment decisions. Regulatory actions, including SEC No-Action Letters, do not guarantee safety or profitability. Token allocations, unlock schedules, and insider holdings can impact liquidity and price.

The publisher and authors bear no responsibility for any losses or decisions made based on this content. Past performance is not indicative of future results. Invest only what you can afford to lose.