Crypto Task Force Written Input

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.

Date Written Input Topic(s) Key Points
Kecheng Lai, Knowpia Inc.

Recommendation Letter 		Security Status, Tokenization, Trading
  • STO+ tokens are designed to mirror preferred stock characteristics, entitling holders to dividend distributions without direct ownership or operational management rights.
  • All token transactions are recorded transparently on decentralized blockchain smart contracts, ensuring a fully auditable, secure, and traceable transaction history.
  • Trading of STO+ tokens will occur exclusively on U.S.-based, SEC-compliant token exchanges to ensure ongoing regulatory adherence and oversight.
Ronald Hale

Letter to the Crypto Task Force 		Custody, Public Offerings, Regulatory Sandbox, Security Status, Tokenization, Trading
  • The proposed framework introduces the "Satoshi test" to classify crypto assets, focusing on investment of value, centralized control, expectation of returns, efforts of others, decentralization level, and transparency.
  • Regulatory components include guidelines for development and governance, classification of coins and tokens, oversight of economic activities like staking and mining, funding mechanisms, and standards for trading platforms and wallets.
  • Recommended investor protection measures include education campaigns, dispute resolution mechanisms, compensation funds or insurance for fraud victims, and international collaboration to address cross-border crypto issues.
     
Cindy Hart, EROS Risk Consulting

Letter to the Crypto Task Force 		Regulatory Sandbox, Security Status, Tokenization, Trading
  • Federal securities law and other federal and state regulations would apply based on the actual trading activity performed, requiring an interagency framework to factor in emerging risks.
  • The framework should consider identifying the full spectrum of risks, performing regulatory mapping, and providing interpretive guidance on activities that qualify for exemption.
  • Interagency participation is crucial in comprehensively identifying risks based on each agency's mission, including investment activity, registered investment advisors, financial crimes, accounting standards, safety and soundness, tax implications, and consumer regulations.
     
Ripple

Letter to the Crypto Task Force 		Custody, Regulatory Sandbox, RFI Responses, Safe Harbor, Security Status, Tokenization, Trading
  • The SEC lacks authority over most digital assets and transactions involving them, as it can only regulate "securities" and transactions involving securities as defined by the Securities Act of 1933 and the Securities Exchange Act of 1934.
  • The application of the Howey test under the prior administration was distorted, leading to market disruption and driving innovation outside the United States.
  • The SEC should confirm that staking and yield-generating arrangements dependent on the programmatic functioning of a public, permissionless network that do not involve a definable issuer or counterparty making investment commitments are not considered securities.
Lewis Cohen, Cahill Gordon & Reindel LLP

Letter of Lewis Rinauldo Cohen (CahillNXT) to Crypto Task Force (March 20 2025) 		Regulatory Sandbox, Security Status
  • The document outlines the regulatory framework for crypto assets, emphasizing the need for clear guidelines to ensure compliance and protect investors.
  • It discusses the importance of establishing a regulatory sandbox to foster innovation while maintaining oversight.
  • The document highlights the necessity of defining the security status of various crypto assets to provide legal clarity.
Lewis Cohen, Cahill Gordon & Reindel LLP

What We Talk About When We Talk About (Tokens) 		Public Offerings, RFI Responses, Safe Harbor, Security Status
  • The absence of a clear regulatory perimeter for crypto asset activity in the U.S. has resulted in market structure distortions and challenges for price discovery in the crypto asset sector.
  • Fundraising transactions involving crypto assets intended to develop, improve, or promote a blockchain system must be registered with the Commission or exempt from registration.
  • The Commission should consider adopting safe harbor guidance for subsequent sales of crypto assets by project teams or insiders, subject to certain conditions.
Patrick Daugherty, Foley & Lardner LLP

Re: Restatement of the Howey Common Law of Crypto Assets; Recommendations 		Safe Harbor, Security Status, Trading
  • The SEC should ratify "When Howey Met Gary (Plastic)" as a correct interpretation of the Howey test as applied to crypto assets and revise the FinHub Framework to clearly indicate which combinations of factors provide a strong indication that the asset is an investment contract security.
  • The SEC should make it clear that its existing no-action letters on crypto assets no longer reflect the expansive view of Howey and endorse the legality of publicly-traded "utility tokens" as other market regulators do.
  • The SEC should issue guidance about the proper use of Securities Act registration exemptions such as Rule 144, Regulation D, and Regulation S relative to the offer and sale of crypto assets that are offered and sold as part of investment contracts.
     
Andrew Smith, Virtu Financial

RE: Crypto Task Force Input 		Crypto ETPs, Crypto Lending, Custody, Regulatory Sandbox, Safe Harbor, Security Status, Tokenization, Trading
  • The determination of whether a token qualifies as a security is crucial for establishing regulatory boundaries and providing clear guidance to market participants.
  • Broker-dealer custody rules should be revised to apply consistent risk-based haircuts to crypto assets, similar to other asset classes.
  • Enhancing custody solutions for investment advisers is essential for fostering growth and mainstream acceptance of crypto assets.
Dimitry Jean-Noel II

A Unified Framework for Digital Asset Regulation 		Custody, Regulatory Sandbox, Safe Harbor, Tokenization, Trading
  • Establish regulatory clarity to encourage investment and prevent capital flight to more favorable jurisdictions.
  • Implement ISO 20022 to align blockchain with traditional finance and enhance financial intelligence.
  • Develop a tiered compliance model based on risk exposure and entity type.
Dimitry Jean-Noel II

SEC Open Letter 		Regulatory Sandbox, Safe Harbor, Security Status, Tokenization, Trading
  • Adoption of ISO 20022 as the standard for digital asset transactions to enhance AML/KYC capabilities and align U.S. financial infrastructure with international payment standards.
  • Establishment of a unified, tiered regulatory framework for centralized entities, decentralized finance, and emerging digital assets.
  • Enactment of stablecoin legislation to ensure U.S. financial institutions can lead in global digital payments.