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
Lilya Tessler, Sidley Austin LLP, on behalf of The Digital Chamber

Security Status of Certain Crypto-Asset (Token) Transactions 		Custody, RFI Responses, Security Status, Trading
  • The letter discusses the criteria for determining whether certain crypto-asset transactions qualify as securities under existing regulations.
  • It outlines the regulatory implications for entities involved in the issuance, trading, and custody of these crypto-assets.
  • The letter emphasizes the need for clear guidelines to ensure compliance and protect investors
Solana Policy Institute, Superstate Inc., and Zagreus Services LLC (dba Orca Creative)

RE: Project Open - Proposing the Open Platform for Equity Networks 		Custody, Public Offerings, Regulatory Sandbox, Security Status, Tokenization, Trading
  • The SEC is requested to exercise its exemptive authority under Section 28 of the Securities Act of 1933 and Section 36 of the Securities Exchange Act of 1934 to permit the issuance and trading of equity securities on public blockchain networks.
  • Project Open Token Shares would be issued via a registration statement filed with the SEC and subject to periodic reporting requirements under the '34 Act.
  • All Token Shares must be held in either non-custodial/self-custodial trader wallets or sub-wallets created for a trader and held by a Broker-Dealer or other appropriate third-party custodian.
     
SEA SWAMI LLC

The Tunney Act 		Custody, Security Status, Trading
  • The Tunney Act governs the judicial review process for consent decrees proposed by the DOJ in antitrust cases, ensuring transparency, public interest, and judicial oversight.
  • The Act's procedural framework could hypothetically be adapted to regulate cryptocurrency markets, addressing concerns like market manipulation, monopolistic practices, or consumer protection.
  • The framework involves mandatory settlement proposals, public disclosure and comment periods, judicial review, interagency coordination, and enforcement and compliance mechanisms.
Lee W. McKnight, Syracuse University School of Information Studies

Distinguishing Jokers from Thieves. Rug Pullers vs SEC Crypto Policies 3.0: Nolo Contendere by Regulatory Design 		RFI Responses, Security Status, Tokenization, Trading
  • The document emphasizes the need for the SEC to consider AI-powered automation and efficiency gains in market oversight mechanisms to improve investor protection.
  • It suggests that the SEC should support demonstrations of exploratory instances of new tools to encourage entrepreneurs and reassure investors.
  • The document highlights the importance of a clear and consistent regulatory framework to encourage innovation and protect investors in digital asset markets.
Johann Kerbrat, Robinhood Crypto

Re: Tokenization of Real-World Assets 		Custody, Security Status, Tokenization, Trading
  • Tokenization of RWAs will transform market structure, reduce risk, and provide numerous benefits to market participants.
  • A new federal regulatory approach is needed to allow tokenization to flourish and provide consistency to the marketplace.
  • Broker-dealers should be permitted to custody and trade tokenized RWAs and other digital assets more freely.
     
Etherealize

Modernizing Transfer Agent Rules for U.S. Leadership in Tokenized Securities 		Custody, RFI Responses, Safe Harbor, Security Status, Tokenization
  • The memo urges the SEC to issue interpretive guidance clarifying that ancillary actors in decentralized blockchain systems are not considered transfer agents.
  • It recommends using the SEC's exemptive authority to create blockchain-based exemptions to existing transfer agent registration mandates.
  • The memo suggests exploring smart contract equivalency to fulfill specific transfer agent functions and establishing standards for blockchain record-keeping systems.
John A. Zecca, Nasdaq, Inc.

Re: What’s in a Name? A Stock by Any Other Name ... Nasdaq Inc.’s Response to “There Must Be Some Way Out of Here” 		Custody, Public Offerings, Regulatory Sandbox, RFI Responses, Safe Harbor, Security Status, Tokenization, Trading
  • The document emphasizes the need for a clear and predictable taxonomy for digital assets to ensure consistent regulation and avoid market distortions.
  • It advocates for a regulatory framework that balances innovation with investor protection, suggesting a light-touch regime for digital assets posing lower risks.
  • The document proposes the establishment of a temporary safe harbor for digital assets not yet clearly classified, allowing them to go to market quickly while pending definitive regulatory classification.
Kecheng Lai, Knowpia Inc.

Recommendation Letter - Supplementary Clarification No. 6: STO+ and the Future Economies of Tokenized Security 		Public Offerings, Security Status, Tokenization, Trading
  • The STO+ model integrates functional utilities, application scenarios, or community governance features into security tokens, combining "securities" with "utility" in a dual-role token.
  • STO+ projects require compliance with securities laws and additional disclosure of token utility and platform tokenomics.
  • STO+ is particularly suitable for Web3 platforms, community-driven projects, and real-world industries with utility-based tokenization.
     
KPMG LLP

RE: Request for response to Crypto Task Force questions 		Custody, Security Status, Tokenization, Trading
  • The document emphasizes the need for clarity in market structure, registration, exchanges, and custody to strengthen the foundation for engaging in the crypto industry.
  • It highlights the importance of principles-based guidance and the role of independent standard-setters like FASB, PCAOB, and AICPA in developing and amending crypto asset accounting and auditing standards.
  • The document discusses the unique auditing challenges presented by crypto assets and the need for clear guidance on what constitutes reliable audit evidence, particularly from decentralized blockchains.
James Walker, Lowell Ness, Arthur Greenspan, Valeska Pederson Hintz, Zeeve Rose, Perkins Coie LLP

Recommendations to the Crypto Task Force to Propose a Framework and Address “Security Status” and “Scoping Out” 		Security Status, Tokenization, Trading
  • The document proposes a framework for distinguishing securities transactions from non-securities transactions, emphasizing the importance of analyzing the facts and circumstances of each transaction separately rather than in the aggregate.
  • It suggests that crypto assets should be treated as commodities unless they provide holders with rights to a share of profits or a return on investment, in which case they should be considered securities.
  • The document recommends that certain crypto assets, such as payment stablecoins and meme coins, should not be treated as securities if they are offered and sold in a manner consistent with specific guidelines.