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
Charles W. Mooney, Jr., University of Pennsylvania Carey Law School

Potential Exemptive Order: Tokenization of Traditional Securities 		Custody, Regulatory Sandbox, Safe Harbor, Tokenization, Trading
  • The potential SEC exemptive order for tokenized securities could unintentionally entrench the monopoly of the current intermediated securities holding infrastructure.
  • The current intermediated holding system imposes substantial costs on issuers and investors, which could be alleviated by a direct-holding model.
  • An independent study is recommended to assess the current securities holding infrastructure and explore potential reforms, including the implementation of a direct-holding model.
DeFi Education Fund and Uniswap Foundation

Re: Response to the Crypto Task Force’s Request for Comment: Regarding Decentralized Autonomous Organizations 		RFI Responses, Safe Harbor, Security Status, Tokenization, Trading
  • DEF and UF support Commissioner Peirce's proposal for a non-exclusive safe harbor (Rule 195) that would provide a time-limited exemption from registration requirements under the Securities Act of 1933 for offers and sales of cryptocurrency assets during the development of a blockchain project.
  • DEF and UF argue that a DAO with dispersed control over governance should not have its network tokens or transactions considered as securities under the Howey test.
  • DEF and UF emphasize that blockchain records eliminate informational asymmetries, making traditional disclosure requirements unnecessary for sufficiently decentralized networks.
Irene Aldridge, AbleBlox

Challenges with Crypto Adoption 		Crypto ETPs, Regulatory Sandbox, Security Status, Trading
  • The market design of major blockchains, such as Bitcoin and Ethereum, presents significant challenges, including potential fraud by validators and systemic issues.
  • The Ethereum matching engine, based on a periodic-auction market design, has led to documented fraud by validators, highlighting the need for better mechanism design alternatives.
  • Adoption of newer and improved mechanism design alternatives is essential to address the systemic issues in cryptocurrency markets.
Etherfuse, Brogan Law PLLC

Toward a Framework for Tokenized Sovereign Bonds 		Custody, Public Offerings, Regulatory Sandbox, RFI Responses, Security Status, Tokenization, Trading
  • Etherfuse Stablebonds are tokenized bonds backed by sovereign bonds maintained in audited, transparent collateral reserves and are legally offered in Mexico through a resolution from the Mexican financial authority (CNBV).
  • Etherfuse prohibits U.S. Persons from accessing Stablebonds, implementing geofencing and KYC checks to ensure compliance with this limitation.
  • The document proposes that the SEC provide exemptive relief under Section 28 of the Securities Act of 1933 to allow unregistered offering of certain sovereign bonds classified as "Qualifying Foreign Government Securities" (QFGSs).
Jessica Furr, Dragonfly

State of Airdrops Report 2025 		Regulatory Sandbox, Safe Harbor, Security Status
  • The report argues that airdrops should not be classified as securities transactions under the Howey test, as they do not involve an investment of money, lack a common enterprise, and do not create an expectation of profits derived from the efforts of others.
  • It highlights the adverse economic impact of geoblocking U.S. users from airdrops, estimating significant revenue and tax losses due to restrictive U.S. policies.
  • The report recommends establishing a regulatory safe harbor for airdrops that are not intended as fundraising tools, to encourage innovation and provide clear guidelines for compliance.
Margaret Rosenfeld, Everstake, Inc.

Re: Crypto Task Force Meeting 		Custody, RFI Responses, Security Status, Trading
  • Staking is central to the functioning of proof-of-stake blockchain networks and should not be mischaracterized as an investment or financial contract.
  • Misclassification or overregulation of staking could weaken blockchain infrastructure, reduce validator participation, and drive activity offshore.
  • Non-custodial staking services help decentralize stake distribution and mitigate systemic risks by empowering individual token holders to retain control over their assets.
The Digital Chamber

Re: Safe Harbor from Registration 		Safe Harbor, Security Status, Tokenization, Trading
  • The letter urges the Commission to align its safe harbor efforts with similar provisions in market structure legislation to avoid regulatory confusion.
  • It requests interpretive guidance clarifying that common communications about network milestones do not create a reasonable expectation of profit and do not constitute investment contracts.
  • The letter emphasizes that crypto assets sold under the safe harbor should not be considered securities themselves, and secondary trading of these assets should not be treated as investment contract transactions.
Mohamed ElBendary

Memo: Policy-Aware DeFi via the Hook Manager Framework—Regulatory Considerations for SEC 		Regulatory Sandbox, Security Status, Trading
  • The Hook Manager Framework (HMF) enables adaptable, on-chain enforcement of compliance policies in DeFi protocols, ensuring regulatory alignment and systemic risk reduction.
  • Compliance logic is separated from the core protocol, allowing upgradability and flexible, jurisdiction-specific enforcement without disrupting core protocol code.
  • The framework supports on-chain auditability and transparency, creating real-time, immutable audit trails accessible to regulators and third-party monitors.
Mohamed ElBendary

Uniswap Protocol V4 Hook-based On-Chain Policy Orchestration Architecture 		Custody, Security Status, Tokenization, Trading
  • The Hook Manager framework enables the implementation of complex business rules through modular, customizable, and upgradeable policy-specific hook contracts.
  • The proposed decentralized governance model, potentially utilizing the UNI token, oversees the registration and management of policy hooks, ensuring community alignment.
  • The architecture enhances security by isolating concerns and facilitates features critical for institutional adoption and Real-World Asset (RWA) integration.
Brandon H. Ferrick, Douro Labs LLC

Re: Non-Custodial Trading Interfaces Should Not be Considered “Brokers” or “Exchanges” under Federal Securities Laws 		Custody, Regulatory Sandbox, Safe Harbor, Security Status, Trading
  • Non-custodial trading interfaces (NTIs) should not be considered "brokers" or "exchanges" under federal securities laws as they do not control or custody user funds, solicit transactions, or provide personalized investment recommendations.
  • NTIs act solely as technological tools that enable users to draft and optimize transactions without intermediating trades or exercising control over the underlying protocol.
  • The SEC is requested to issue guidance confirming that NTIs are not required to register as brokers or exchanges, ensuring clarity and fostering innovation in non-custodial platforms.