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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.
The utility and real-world use case of a digital asset should be a primary determining factor in whether the asset is deemed a "security" under U.S. federal securities laws.
Digital assets with utility and real-world use cases are more appropriately regulated by the Commodity Futures Trading Commission (CFTC) rather than the Securities and Exchange Commission (SEC).
The regulatory approach should avoid excessively complicated, multi-part legal tests and instead focus on practical, usable, and reasonable legal standards.
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.
Custody, RFI Responses, Safe Harbor, Security Status
Proposes a Qualified Self-Custodian (QSC) framework for Registered Investment Advisers (RIAs) to self-custody digital assets when traditional Qualified Custodian (QC) options are unavailable.
Emphasizes the need for RIAs to document their fiduciary judgment and implement safeguarding principles to protect investors while self-custodying digital assets.
Requests interim regulatory guidance and potential rulemaking to address the regulatory gap and facilitate secure, legal, and practical self-custody solutions for digital assets.
Deloitte encourages the SEC to align its work with the President’s Working Group on Digital Asset Markets to propose a Federal regulatory framework for digital assets.
Deloitte emphasizes the need for a principles-based framework rooted in established laws and regulations to ensure predictability and adaptability as the digital asset market evolves.
Deloitte highlights the importance of coordination among regulators and standard setters to avoid regulatory fragmentation and reduce the risk of regulatory arbitrage.
Permissionless or open, public blockchains, including decentralized finance (DeFi), are best positioned to enable the SEC to meet its policy goals relating to capital and digital asset markets.
Safe harbor exemptive relief should extend to the Securities and Exchange Act of 1934, as well as the Securities Act of 1933, and incorporate specific considerations related to DeFi.
The SEC should implement a regulatory sandbox for securities tokenization on open blockchains to develop a new regulatory architecture leveraging open blockchains and complementary technologies.
The Blockchain Association (BA) advocates for an incremental, flexible approach to regulating crypto asset trading, emphasizing the need for the SEC to adapt existing rules to accommodate technological and market innovations.
BA suggests that the SEC should not impose requirements for investors to transact through intermediaries, and should leverage blockchain technology to enhance market efficiency and transparency.
BA recommends specific updates to SEC rules, including relief from certain timing requirements for trade confirmations, modifications to net capital rules for broker-dealers, and allowing blockchain-based books and records for regulatory purposes.
Custody, Public Offerings, RFI Responses, Security Status
PwC emphasizes the need for a framework that identifies how the characteristics of different crypto assets (e.g., stablecoins, non-fungible tokens) determine their security status.
PwC suggests leveraging existing public offering rules with necessary modifications for crypto assets that meet the definition of a security.
PwC recommends expanding custody-related regulations to provide adequate investor protection for crypto assets, even if they do not meet the definition of a security.
The SEC should clarify that most digital assets and digital-asset transactions are not investment contracts under current law.
The SEC should use its exemptive authority to make clear that digital assets and transactions without forward-looking contractual obligations are not subject to federal securities laws.
If a safe harbor is established, it should be based on the concept of "control" rather than ownership to determine the applicability of securities laws.
Andreessen Horowitz recommends that the SEC establish a taxonomy that clearly identifies when crypto assets may be subject to registration requirements.
Andreessen Horowitz recommends that the SEC issue interpretive guidance that distinguishes between seven types of crypto assets.
Andreessen Horowitz recommends that the SEC provide exemptive relief, where necessary, to: establish a tailored disclosure framework, clarify reporting requirements under the Exchange Act, provide a pathway for decentralization under Exchange Act requirements, and enable onchain transactions of registered crypto assets.
Staking and Staking Services do not constitute securities transactions under federal securities laws, as they do not meet the criteria for investment contracts or notes.
The provision of Staking Services involves technical activities that secure blockchain networks and are compensated through protocol-defined rewards, not managerial efforts.
Regulatory clarity is requested to confirm that staking activities do not constitute the offer and sale of securities, which would help the industry flourish with U.S. participants.
