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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.
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).
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.
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 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.
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.
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.
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.
Figure Markets Holdings, Inc. and Figure Certificate Company
The use of YLDS trading pairs as a settlement mechanism for non-security crypto transactions does not require the registration of the Crypto Platform as a broker, securities exchange, or alternative trading system (ATS).
YLDS are registered under the U.S. Securities Act of 1933 and the Investment Company Act of 1940, providing holders with protections and disclosures under federal securities laws.
The Crypto Platform facilitates peer-to-peer transactions in non-security crypto assets, and the use of YLDS as a settlement mechanism is optional and does not constitute "effecting" transactions in securities.
Figure Markets Holdings, Inc. and Figure Certificate Company
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 Global Digital Assets & Cryptocurrency Association
Public Offerings, Regulatory Sandbox, Safe Harbor, Security Status, Tokenization, Trading
The Information Guidelines propose a comprehensive disclosure framework for digital asset tokens, aiming to establish transparency and consistency in information disclosure to enable informed decision-making in the digital asset market.
The guidelines align with existing U.S. laws and regulations, as well as global regulatory regimes like MiCA, to promote consistent global adoption of information disclosure practices.
The guidelines provide flexibility for adaptation to different regulatory regimes and industry standards, supporting innovation, market integrity, and capital formation.
