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
Jason Berkun, George Washington University Law School

RE: A Workable “Efforts of Others” Framework for Digital Assets Sold Pursuant to Investment Contracts 		RFI Responses, Security Status, Tokenization, Trading
  • The SEC should use its interpretive authority to protect investors, facilitate capital formation, and maintain fair, orderly, and efficient markets in digital asset transactions.
  • A flexible three-step test is proposed to delineate the "efforts of others" prong of Howey, providing a framework for blockchain projects to decentralize management and avoid being considered sold pursuant to an investment contract.
  • The SEC must draw an arbitrary line to determine whether digital assets are sold pursuant to an investment contract based on control of a blockchain, control of a protocol, and ownership rights in an enterprise or object.
William C. Hughes, Consensys Software Inc.

Re: Amendments Regarding the Definition of “Exchange” (Release No. 34-97309, File No. S7-02-22), RIN 3235–AM45 		RFI Responses, Safe Harbor, Security Status, Trading
  • The amendments exceed the SEC's statutory authority by expanding the definition of "exchange" beyond what the statutory definition permits.
  • The amendments are arbitrary and capricious under the Administrative Procedure Act (APA) because they improperly expand the applicability of broker-dealer regulations rather than exchange regulations.
  • The required cost-benefit analysis is facially insufficient to withstand scrutiny, as the amendments fail to show that their benefits outweigh their costs.