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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.
FCC is not required to perform AML/KYC on counterparties to peer-to-peer transactions involving YLDS, as FCC is not a "financial institution" under the Bank Secrecy Act (BSA) and FinCEN regulations.
Even if FCC were subject to BSA/AML requirements, peer-to-peer transaction counterparties are not considered "customers" of FCC under the relevant FinCEN rules applicable to mutual funds.
Requiring FCC to perform AML/KYC on peer-to-peer transaction counterparties would impose significant compliance costs and place FCC at a competitive disadvantage compared to other stablecoin issuers.
The SEC should recognize modern disclosure platforms under state manual exemption regimes to replace outdated paper-based publishers, facilitating lawful secondary trading of tokenized and exempt securities.
The SEC should permit broker-dealers and ATSs to rely on structured digital disclosures under Rule 15c2-11, enhancing compliance and transparency in secondary markets.
The SEC should extend federal preemption to secondary trading of securities from issuers current in Reg A reporting, particularly when such reporting is conducted via structured platforms like GUARDD.
Blaine Luetkemeyer, American Consumer and Investor Institute
The SEC should provide clear guidance and a streamlined no-action path for blockchain-based clearance and settlement systems to facilitate innovation without compromising regulatory oversight.
The SEC should clarify that when a token represents an already-registered or exempt security, the token itself does not require separate SEC registration, reducing regulatory friction while maintaining oversight over the underlying financial instrument.
The SEC should establish a formal registration pathway for staking services that do not fit neatly within existing securities frameworks, including modified reporting requirements that address staking-specific concerns.
Antonio Lanotte, Global Blockchain Business Council
The EU market in cryptoassets (MiCA) regulation introduces specific rules for stablecoins, requiring issuers to meet capital and governance requirements and comply with AML, custody, and operational rules.
The DLT pilot regime allows for the creation of DLT-based trading venues and settlement systems, providing temporary exemptions from certain EU financial rules to test innovations.
Luxembourg's Blockchain Law IV explicitly recognizes and regulates the use of DLT for issuing, registering, and transferring dematerialized securities, introducing a "control agent" to monitor and verify transactions in real time.
Interop Labs urges the SEC to distinguish between centralized and decentralized interoperability networks and to issue guidance or a safe harbor exempting decentralized, non-custodial systems from intermediary registration requirements.
The document proposes principles for evaluating decentralization, including open-source protocols, public accessibility, permissionless operation, immutability, and distributed governance.
Interop Labs emphasizes that decentralized interoperability networks reduce systemic vulnerabilities and uphold investor protections through protocol-level safeguards.
The SEC should confirm the scope of existing custody rules with respect to crypto assets, as many crypto assets do not fall within the definition of "securities" or "client funds" under the Advisers Act.
The SEC should expand the definition of "qualified custodian" to include state-chartered trust companies and other entities that meet substantially similar standards.
RIAs should be permitted to self-custody crypto asset securities when no qualified custodian is available, with appropriate safeguards and disclosures.
Matthew Comstock, Willkie Farr & Gallagher LLP, on behalf of The Digital Chamber
The Digital Chamber (TDC) advocates for a technology-neutral, principles-based approach to broker-dealer custody of crypto assets, emphasizing exclusive control over private keys through secure key management practices.
TDC requests the SEC to amend Rule 15c3-3 to allow broker-dealers to establish possession or control of crypto asset securities using various approaches and technologies, including third-party vendors.
TDC urges the SEC to confirm that broker-dealers can use Section 3(a)(6) Banks as control locations for crypto asset securities and to amend Rule 15c3-3 to explicitly include crypto asset securities.
Anderson P.C. supports an activity-based regulatory framework over asset-based classification, advocating for the bifurcation of "security" definitions under the '33 and '34 Acts to provide clearer compliance pathways for digital assets.
The letter urges the SEC to issue interpretive guidance affirming decentralized oracle networks (DONs) as legitimate and reliable price benchmarks under fair value accounting standards and SEC rules.
Anderson P.C. recommends a tailored disclosure framework for network tokens, emphasizing transparency about tokenomics, governance, security audits, contributor incentives, and decentralization milestones.
Securities Industry and Financial Markets Association (SIFMA)
SIFMA recommends that the SEC adopt clear, consistent, and consensus-driven taxonomies and classification approaches for digital assets to provide greater clarity to market participants.
SIFMA urges the SEC to apply traditional regulatory principles around custody to digital assets, including the separation of financial activities, segregation of client assets, and ensuring proper control of assets.
SIFMA supports the SEC's efforts to provide guidance scoping-out non-securities digital assets and digital asset activities, emphasizing a technology-neutral approach.
The Commission should adopt clear, evidence-based standards for reviewing crypto-asset based ETPs, focusing on the size and liquidity of the underlying spot market rather than the existence of a surveillance-sharing agreement (SSA) or a regulated market.
Market capitalization and the number of active spot markets should be prioritized as the most significant factors in evaluating crypto assets for ETP listing.
The historical track records of ETFs registered under the Investment Company Act that obtain exposure to the same assets as a proposed ETP should be highly instructive to the Commission.
