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
Vanguard Global Holdings LLC

RE: Letter to the Crypto Task Force 		Regulatory Sandbox, Security Status, Tokenization
  • The letter urges the SEC to create a clear, adaptable framework to evaluate early-stage blockchain projects along the centralization-decentralization spectrum.
  • It proposes phased registration options, provisional classifications, or defined regulatory timelines to support the natural transition from centralized to decentralized models.
  • The letter emphasizes the importance of regulatory fairness to democratize access to blockchain technology and foster innovation.
Jacklyn DeMar, The Anti-Fraud Coalition

Letter to the Crypto Task Force 		Regulatory Sandbox, RFI Responses, Safe Harbor, Security Status, Trading
  • The TAF Coalition recommends that the SEC recognize some digital assets as securities and allocate sufficient resources to enforce crypto-related securities fraud.
  • The SEC's whistleblower program has been effective in identifying and prosecuting crypto fraud, resulting in significant monetary penalties and returns to harmed investors.
  • The SEC is uniquely positioned to combat securities fraud in the crypto industry due to its budget, expertise, and enforcement capabilities.
Ripple

Letter to the Crypto Task Force 		Safe Harbor, Security Status, Trading
  • Judge Torres ruled that XRP itself is not a security, even though Ripple had previously sold some units of XRP as part of investment contracts.
  • The SEC's guidance should adhere to existing law to reduce market confusion and avoid reliance on vague concepts like "fully functional" or "sufficiently decentralized."
  • A well-designed safe harbor could provide meaningful protection to good-faith actors navigating genuine legal uncertainty.
Deon Ho, My Fusion International Pte. Ltd

Written Input on Tokenization and Investor Transparency from FusionPay 		Security Status, Tokenization, Trading
  • FusionPay provides transparent, verifiable sales reports through on-chain transaction recording.
  • Decentralized crowdfunding with built-in audit trails allows businesses to tokenize and sell future sales to investors.
  • Smart contract-based revenue distribution minimizes fraud and offers investor protections through automation.
Lilya Tessler, Sidley Austin LLP on behalf of Ava Labs, Inc. and Owl Explains

Supplemental Submission Proposing a Nature of the Activity Test to Determine Whether Infrastructure Providers Need to Register as Securities Intermediaries 		Custody, RFI Responses, Security Status, Tokenization, Trading
  • The submission proposes a nature of the activity test to determine whether infrastructure providers need to register as securities intermediaries.
  • The test aligns with existing statutory definitions, the Howey framework, and decades of SEC Staff no-action guidance for analogous activities.
  • The submission argues that infrastructure providers should not be misclassified merely because their activities take place on the blockchain or involve crypto assets.
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.