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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.
Douro Labs requests SEC guidance clarifying that securities laws do not preclude the use of pricing data from decentralized oracle networks for asset valuation, provided the networks meet quality, transparency, and resiliency standards.
The letter emphasizes that decentralized oracle networks can enhance competition, efficiency, and investor protection in the financial data market by providing comprehensive, trustworthy, and affordable pricing data.
Douro Labs suggests that the SEC issue interdivisional FAQs to define decentralized oracle networks, outline their threshold attributes, and confirm their permissible use for regulatory calculations under existing securities laws.
The Modular Consent Mechanism (MCM) ensures cryptographically verifiable investor consent, enhancing regulatory compliance and investor protection.
The MCM integrates biometric verification and adaptive reputation authentication to validate high-risk transactions, ensuring informed and intentional investor approval.
The MCM's architecture supports interoperability across blockchain networks, providing immutable, auditable records for regulatory oversight.
The proposal introduces a three-class taxonomy for Biokens—Class A (Mature Ecosystem Tokens), Class B (Developing Ecosystem Tokens), and Class C (Specific Ecosystem Service Tokens)—all treated as tokenized securities, with tailored regulatory requirements and rights for each class.
It recommends the establishment of a regulatory sandbox, issuance of a conditional no-action letter, and development of certification standards for environmental oracles to enable controlled pilots and eventual full-scale implementation.
The framework includes a hybrid governance model combining scientific, community, and investor input, and mandates transparency, insurance, and audit mechanisms to safeguard investor interests and ensure data integrity.
Custody, Public Offerings, Regulatory Sandbox, Security Status, Tokenization, Trading
The whitepaper outlines a multi-jurisdictional compliance strategy that integrates AI-driven risk modeling with real-world asset (RWA) tokenization, ensuring adherence to evolving financial regulations across key markets.
It proposes a legally structured framework for issuing tokenized RWAs, including mechanisms for investor protection, asset verification, and on-chain auditability, aligning with securities law requirements.
The ecosystem incorporates a decentralized governance model with defined roles and responsibilities, including legal accountability for validators and data providers involved in AI model training and financial decision-making.
Regulatory frameworks for tokenized securities must preserve core investor protections—such as best execution, custody safeguards, and conflict-of-interest disclosures—by adapting existing securities laws rather than bypassing them.
Any innovation exemption or regulatory sandbox must include public input, clear disclosure requirements, and structural guardrails (e.g., transaction caps, duration limits, and exit criteria) to prevent regulatory arbitrage and protect market integrity.
Tokenization does not alter the legal nature of an asset; thus, tokenized securities and derivatives must remain subject to existing securities and derivatives laws, with regulatory treatment based on economic substance rather than technological form.
FIA PTG urges the SEC to formally recognize that the Howey test must be applied on a transaction-by-transaction basis, and that most secondary-market crypto transactions do not constitute securities transactions unless under exceptional circumstances.
The group supports a safe harbor framework, as proposed by Commissioner Peirce, to provide legal certainty for crypto projects during their development phase, emphasizing decentralization based on control rather than ownership thresholds.
FIA PTG recommends that tokenized assets and stablecoins be explicitly recognized as eligible collateral under SEC rules, provided appropriate risk management policies are in place.
The SEC should not create a new registration category for platforms trading tokenized securities; instead, it should adapt existing frameworks (e.g., NSE, ATS) to accommodate blockchain-based trading infrastructure.
The SEC should clarify or amend rules to permit side-by-side and pairs trading of securities and non-securities (e.g., stablecoins, bitcoin) on a single platform, treating such transactions as securities trades when appropriate.
A principles-based approach to best execution should be adopted for both offchain and onchain environments, emphasizing transparency, operational integrity, and flexibility in execution standards.
Crypto ETPs, Custody, Public Offerings, Security Status, Tokenization, Trading
The SEC’s May 2025 Staking Guidance affirms that Solo Staking, Delegated Staking, and certain Staking Services do not constitute securities transactions, supporting the legal viability of using LSTs in ETPs under existing frameworks.
LSTs, such as JitoSOL, function as decentralized technological utilities where any expectation of profit arises from autonomous protocol operations rather than third-party managerial efforts, aligning with the SEC’s criteria for non-security classification.
Incorporating LSTs into ETPs does not require altering the traditional grantor trust structure used for cryptoasset ETPs, as LSTs can be treated analogously to direct staking or staking services under current SEC interpretations.
Andrew Hinkes, Winston & Strawn, on behalf of The Digital Chamber
Direct lenders generally use typical lending structures, and securities laws are only implicated when securities are lent or when collateral that is a security is rehypothecated.
Custodial crypto lending platforms involve bilateral contractual arrangements with the platform and borrowers, with interest shared proportionately among lenders.
Non-custodial liquidity protocols and NCCMPs operate without legal relationships between users, with transactions governed by smart contracts and algorithmic rules.
Andrew Hinkes, Winston & Strawn, on behalf of The Digital Chamber
The Commission should only exercise jurisdiction over transactions that include lending of securities and should clarify what assets are and are not securities.
The Commission should take a balanced approach, mindful of the impacts of regulation on the development of technology and the limits of its jurisdiction.
The Commission should establish clear and workable guidelines around disclosure, collateral treatment, and capital requirements for crypto lending platforms.
