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
Andrew Smith, Virtu Financial

RE: Crypto Task Force Input 		Crypto ETPs, Crypto Lending, Custody, Regulatory Sandbox, Safe Harbor, Security Status, Tokenization, Trading
  • The determination of whether a token qualifies as a security is crucial for establishing regulatory boundaries and providing clear guidance to market participants.
  • Broker-dealer custody rules should be revised to apply consistent risk-based haircuts to crypto assets, similar to other asset classes.
  • Enhancing custody solutions for investment advisers is essential for fostering growth and mainstream acceptance of crypto assets.
Dimitry Jean-Noel II

A Unified Framework for Digital Asset Regulation 		Custody, Regulatory Sandbox, Safe Harbor, Tokenization, Trading
  • Establish regulatory clarity to encourage investment and prevent capital flight to more favorable jurisdictions.
  • Implement ISO 20022 to align blockchain with traditional finance and enhance financial intelligence.
  • Develop a tiered compliance model based on risk exposure and entity type.
Dimitry Jean-Noel II

Digital Asset National Security 		Custody, Regulatory Sandbox, Security Status, Tokenization, Trading
  • Preserving Dollar Dominance: The rise of China's digital yuan and alternative settlement systems threatens the U.S. dollar's global reserve currency status. Stablecoin leadership is an essential countermeasure.
  • Regulatory Clarity as a Strategic Imperative: The U.S. must adopt a balanced, innovation-friendly regulatory framework to prevent talent and capital flight to competitor jurisdictions.
  • Financial Intelligence & Anti-Money Laundering (AML): Blockchain enhances financial oversight with real-time fraud detection, enhanced AML/KYC compliance, and improved sanction enforcement.
Brandon Ferrick, Douro Labs LLC

Re: Responses to Commissioner Peirce’s “There Must Be Some Way Out of Here” 		Custody, RFI Responses, Safe Harbor, Security Status, Tokenization, Trading
  • The SEC should issue interpretive guidance that decentralized oracle networks (DONs) are acceptable benchmark tools for crypto asset prices.
  • Investment funds holding digital assets could use DON-derived prices to supplement NAV calculations.
  • Broker-dealers can incorporate DON data into risk models and regulatory calculations.
Paul Grewal, Coinbase

Re: There Must Be Some Way Out of Here: Recommendations on the Regulation of Digital Securities Markets 		Crypto ETPs, Custody, RFI Responses, Safe Harbor, Security Status, Tokenization, Trading
  • Clarification that digital assets not conveying rights in a business enterprise are digital commodities, not securities.
  • Recognition of self-custody and autonomy benefits, allowing investors to hold and control their assets without intermediaries.
  • Proposal for a safe harbor for network and protocol tokens sold through investment contracts, with tailored disclosure requirements.
     
World Federation of Exchanges

Demystifying Tokenisation: Embracing the Future 		Custody, Security Status, Tokenization, Trading
  • Tokenised traditional assets are acknowledged in some jurisdictions to offer the same ownership rights as their traditional counterparts and are regulated accordingly.
  • The Basel Committee on Banking Standards (BCBS) has proposed harsh capital treatments for all tokenised assets due to the evolving nature and unforeseen risks of distributed ledger technology (DLT).
  • Tokenisation requires substantial upfront investment from all market participants without clear gains in highly efficient markets like equity.
     
World Federation of Exchanges

Crypto-Asset Custody: A Blueprint for Regulatory and Operational Excellence 		Custody
  • The document emphasizes the need for clear regulatory frameworks for crypto-asset custody to protect investors and ensure market integrity.
  • It highlights the importance of segregating client assets to ensure they are protected in the event of a company's bankruptcy.
  • The document discusses the necessity of addressing cyber risks through mature cybersecurity programs and thoughtful technology architecture decisions.
     
World Federation of Exchanges

Promoting Sound Marketplaces – DeFi/CeFi, Crypto Platforms & Exchanges 		Crypto ETPs, Custody, Security Status, Tokenization, Trading
  • Exchanges and Crypto-Asset Trading Platforms (CTPs) should adhere to the principle of "same activity, same risks, same rules" to ensure market integrity and investor protection.
  • CTPs should disclose their regulatory status and not describe themselves as "exchanges" until they meet the high standards expected of regulated exchanges.
  • Governments and regulators should require CTPs to segregate market infrastructure functions, hold sufficient financial resources, and have appropriate governance and management requirements.
     
Lee Reiners, Duke University

Prepared Statement for SEC’s Crypto Task Force March 21, 2025 Roundtable titled “How We Got Here and How We Get Out – Defining Security Status” and Responses to “Security Status” Questions in SEC Commissioner Hester Peirce’s February 21, 2025 Statement... 		Custody, Public Offerings, RFI Responses, Safe Harbor, Security Status, Tokenization, Trading
  • The Howey test has been consistently applied to cryptocurrency cases, reaffirming that digital tokens, when offered and sold under investment schemes, are investment contracts subject to federal securities laws.
  • Federal courts have repeatedly confirmed the SEC’s jurisdiction in numerous crypto-related enforcement actions, with the SEC winning or settling the vast majority of over 200 cases.
  • The SEC’s shift in enforcement strategy in 2023, targeting crypto exchanges rather than individual token issuers, has been affirmed by courts, reinforcing the applicability of Howey to these platforms.
     
Anthony Guerino

Proposal to the Crypto Task Force: Positioning for the Tokenized Economy 		Crypto Lending, Custody, Public Offerings, Regulatory Sandbox, Security Status, Tokenization, Trading
  • Advocate for regulatory clarity on XRP, tokenized assets, and stablecoin-AMM integrations.
  • Encourage liquidity infrastructure development to support institutional tokenization initiatives.
  • Monitor BIS and IMF-backed digital currency pilots for integration opportunities.