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Please find written input submissions to the Crypto Task Force below. The written input is posted without modification. We hope sharing the submissions will help encourage productive dialogue and continued engagement. Please note that the “Key Points” and “Topics” are AI generated. AI can make mistakes, and the Key Points and Topics are not a replacement for you reading the submissions. The Crypto Task Force has not reviewed these AI-generated summaries for accuracy or completeness. If you believe a Key Point or Topic is inaccurate, please email the Crypto Task Force at crypto@sec.gov. The written input provided to the SEC and posted on this page does not necessarily reflect the views of the Crypto Task Force or others in the U.S. Securities and Exchange Commission.
SIFMA urges that Regulations ATS and NMS must continue to apply fully to tokenized securities and on chain trading platforms, cautioning against lowering standards for crypto ATSs or exempting new entrants from established investor protection obligations.
Consistent registration requirements (exchange, ATS, broker dealer) are deemed essential for any on chain trading venue, as integration into SIPs/TRFs and market wide surveillance is impossible without formal regulatory status.
Price discovery, transparency, and post trade reporting must remain intact, including harmonized volatility controls and prevention of market fragmentation across tokenized, wrapped, and traditional securities trading environments.
The framework establishes a standardized, cross-domain operational model for digital provenance, chain-of-custody, and bounded verification, ensuring that any digital artifact (including AI-generated content) relied upon for financial, regulatory, or contractual decisions is attributable, reproducible, and subject to replayable review. This model is designed to meet the evidentiary standards required for regulatory examination, legal discovery, and institutional audit, without itself making legal conclusions or imposing new legal obligations.
The framework introduces a tiered access model (Tier 0/1/2) for reviewers and examiners, enabling claim-level, purpose-limited evidence review without requiring pervasive disclosure of sensitive or proprietary data. This supports regulatory and legal oversight by providing examiner-ready Evidence Packs and query packs, while preserving confidentiality and minimizing unnecessary data exposure.
Passage of a claim through the framework’s evidence workflows does not constitute legal authentication, judicial admissibility, or editorial verification. The framework explicitly states that it does not create legal obligations, interpret specific laws, or substitute for legal, compliance, or regulatory review. Evidentiary states produced are inputs to institutional judgment, not substitutes for it.
The submission proposes a Structural Enforcement Standard that embeds legally binding transfer conditions, remedies, revocability, and dispute resolution terms directly into a token’s architecture, ensuring obligations survive every transfer and eliminating reliance on platform-level enforcement.
The model applies traditional trust law architecture—separating authority (trustee) from beneficial rights (beneficiary)—to digital assets through a dual layer token structure that enables automatic, on chain enforcement consistent with established legal doctrine.
The author urges the SEC to grant regulatory clarity and potential safe harbor for tokens adopting this structure, arguing it provides superior investor protection, clearer legal classification, and a scalable foundation for institutional tokenization.
Public Offerings, Security Status, Tokenization, Trading
The letter underscores that applying existing securities-law pathways (Reg A, Reg D, Reg CF, broker dealer requirements, transfer agent rules, and blue sky compliance) to millions of small value real estate tokenizations is economically prohibitive, creating a structural mismatch between current securities regulation and the scale of RWA tokenization.
It raises the question of whether the SEC will consider new, scalable regulatory frameworks tailored to real property tokenization, distinct from those used for institutional grade tokenized assets, to avoid overwhelming regulatory capacity.
It proposes AI assisted disclosure and verification systems as a potential lawful infrastructure for scalable compliance, while acknowledging legal concerns around delegation, data reliability, and alignment with state property law.
The framework establishes a non-normative, examiner-ready operational evidence layer that enables cryptographically verifiable, independently replayable records for sports performance, official results, and revenue-linked claims. This layer is designed to support, not replace, existing league, federation, and contractual governance, making rights and obligations easier to assert, verify, and defend in regulatory and adjudicative contexts.
It mandates multi-source verification, immutable logs, and content-addressed manifests for all material sports and revenue states. This structure is intended to eliminate information asymmetry, reduce the cost and frequency of disputes, and ensure that evidence for contractual triggers, royalty calculations, and anti-doping determinations is independently reconstructable and auditable.
The framework provides institution-safe, implementation-agnostic standards for packaging sports and revenue evidence, including examiner-ready query packs, preservation bundles, and bounded supervisory access. These controls are designed to facilitate institutional investment, regulatory oversight, and auditability, while maintaining strict chain-of-custody and data minimization for sensitive or confidential information.
The framework proposes replacing delayed, periodic financial declarations with a system of continuous, mathematically verifiable, cryptographic evidence of institutional solvency, liquidity, and exposure. This enables real-time supervisory oversight and reduces systemic risk by ensuring that financial state claims are always backed by immutable operational data rather than after-the-fact assertions.
It establishes a tiered access model (Tier 0–2) for regulators, providing the SEC with real-time, purpose-limited visibility into financial states without requiring broad, unrestricted access to sensitive or proprietary data. This model enforces structural purpose limitation, granular logging, and mandatory post-access review, supporting both regulatory objectives and commercial confidentiality.
The framework defines strict governance, reconciliation, and evidence preservation protocols, including automated detection and containment of reconciliation breaks, immutable chain-of-custody records, and examiner-ready preservation bundles. It explicitly does not create new legal obligations, reporting regimes, or safe harbors, but provides an operational evidence layer to support existing legal, regulatory, and audit processes.
Standardized compliance interfaces such as ERC‑7943 can reduce operational risk and fragmentation by enabling consistent eligibility checks, transfer controls, freezing, and enforcement mechanisms across tokenized instruments.
The existence or absence of onchain compliance controls should not be treated as a legal classification test; tokenization does not alter whether the underlying asset is a security under U.S. law.
Tokenized instruments incorporating administrative powers like freezing or forced transfers require transparent disclosure of authority, governance processes, emitted events, and remediation pathways to safeguard investor protection.
The framework explicitly states that it does not create, modify, or supplement any legal obligations, nor does it make legal conclusions regarding ownership, solvency, reserve adequacy, disclosure, or regulatory compliance. All such determinations remain with the relevant legal, accounting, and regulatory authorities.
The kit provides an operational evidence layer for economically material states, enabling independent reconstruction and verification of states such as ownership, reserves, and settlements, but does not adjudicate legal ownership or regulatory status. It is implementation-agnostic and does not prescribe technology, legal standards, or regulatory interpretations.
The framework establishes a tiered supervisory access model (aggregate, scoped, and exceptional/identity-linked), ensuring that evidence can be produced for regulatory review without requiring full public disclosure or unnecessary exposure of institutional or counterparty data. Access is bounded by documented purpose, time-to-live (TTL), and post-access review requirements.
The operating model defines “operational finality conditions met” as an evidence-backed, operational state for settlement, but explicitly states this is not a legal conclusion. Legal finality determinations remain with competent legal authorities and applicable law; the model does not claim to determine legal or regulatory status of instruments or arrangements.
Any yield or reward feature associated with a cash-leg instrument (e.g., tokenized deposits, stable-value rails) must be structurally and operationally separated from the settlement rail, with mandatory disclosure and boundary testing. Introduction or modification of such features triggers recertification and regulatory notification, ensuring compliance with supervisory requirements and preventing undisclosed yield commingling.
The model prohibits any single party from unilaterally controlling settlement, finality, or privileged actions (e.g., escrow release, gate activation). All such actions require quorum/dual authorization, immutable audit logging, and post-event review, ensuring robust separation of duties and regulatory accountability across all operational modes.
The operating model defines “operational finality conditions met” as an evidence-backed, operational state for settlement, but explicitly states this is not a legal conclusion. Legal finality determinations remain with competent legal authorities and applicable law; the model does not claim to determine legal or regulatory status of instruments or arrangements.
Any yield or reward feature associated with a cash-leg instrument (e.g., tokenized deposits, stable-value rails) must be structurally and operationally separated from the settlement rail, with mandatory disclosure and boundary testing. Introduction or modification of such features triggers recertification and regulatory notification, ensuring compliance with supervisory requirements and preventing undisclosed yield commingling.
The model prohibits any single party from unilaterally controlling settlement, finality, or privileged actions (e.g., escrow release, gate activation). All such actions require quorum/dual authorization, immutable audit logging, and post-event review, ensuring robust separation of duties and regulatory accountability across all operational modes.
