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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.
The paper’s core legal framework is that federal securities law should turn on post-deposit control and investor reliance, not labels. It argues that where vault architecture constrains or eliminates managerial discretion through immutable code, timelocks, withdrawal rights, and transparent rules, the rationale for Securities Act, Investment Company Act, and Advisers Act coverage is materially weakened; where humans retain material discretion over allocation, governance, or asset disposition, securities-law obligations are more likely to apply.
For Securities Act purposes, the paper contends that many autonomous, overcollateralized lending vaults may fall outside both Howey and Reves because depositor returns are generated by code-governed market mechanics rather than managerial efforts, and because overcollateralization, automated liquidation, and on-chain transparency support treatment of lending positions as commercial loans rather than securities.
For the Investment Company Act and Investment Advisers Act, the paper argues that regulation should focus on whether investors have actually entrusted assets to a manager exercising ongoing discretion. It proposes that immutable or tightly bounded vaults may not fit traditional investment-company or adviser frameworks, while structures with active curation, discretionary allocation, custody-like control, or investment judgment over securities are more likely to trigger those regimes.
Custody, Public Offerings, Security Status, Tokenization
Recommends requiring issuers (or transfer agents) of tokenized securities to disclose and maintain official token contract addresses by blockchain network in SEC filings, including retired addresses, so investors and intermediaries can verify whether a tokenized asset is authentic and detect counterfeit versions.
Recommends enhancing investor verification tools by linking registered firms offering crypto or tokenized products to their official domains and creating plain-language guidance on how investors can verify crypto platforms, registration status, token addresses, and report impersonation scams.
Recommends investor-protection measures focused on disclosure and fraud prevention, including a standardized "key facts" disclosure format, language-access requirements, investor testing of disclosures, and coordinated anti-impersonation initiatives across regulators.
Action Committee for Crypto Clarity within the United States (ACFCC)
Custody, Public Offerings, Safe Harbor, Security Status, Tokenization, Trading
Urges the SEC to codify in the final rule that, once a crypto system is functional, ongoing services to maintain, secure, or enhance the system do not constitute “essential managerial efforts,” including when those services are performed by an independent service provider rather than the issuer.
Requests a bright-line exclusion for independent ministerial administrators that perform limited functions (such as KYC/AML onboarding and payment routing) without discretion over token economics, governance, treasury assets, or protocol parameters, so they are not treated as issuers, promoters, or providers of essential managerial efforts.
Seeks clarification that automated buyback-and-burn mechanisms funded by third-party commercial payments and executed through immutable smart contracts do not defeat the safe harbor, do not create rights to income or profits, and should not cause the associated token to be treated as a security; also requests coordination with the CFTC to confirm post-safe-harbor treatment of qualifying crypto assets as commodities.
Dmytro Lyushenko, NOTA Digital Currencies Research Center Inc.
Regulated custodians and intermediaries should establish procedures that distinguish between legal authority (e.g., executor, trustee, beneficiary) and technical control (e.g., possession of private keys or credentials), ensuring that lawful successors can access assets even if they lack technical credentials, and preventing unauthorized transfers by those with technical access but no legal entitlement.
The SEC should consider requiring regulated entities to maintain documented, auditable procedures for verifying succession claims, including claimant identity, legal authority, and technical execution, with temporary protective measures during verification and clear records of transfer-of-control events.
Succession procedures must address cross-border legal documents and ensure that technical transfers of tokenized assets are synchronized with legally recognized ownership records, especially for tokenized securities and real-world assets, to avoid gaps between operational and legal ownership.
Tokenized registered-fund shares do not require, and should not receive, Automated Market Maker or venue registration relief, as their structure differs fundamentally from tokenized NMS equities; liquidity is provided by the fund itself, not through secondary trading venues.
Holder-rights parity for tokenized securities depends on an authoritative, regulated register maintained by a registered transfer agent, not on venue-level relief; this ensures correct execution of dividends, voting, and other corporate actions.
The Commission should require that any tokenized security traded on a Tokenized Securities Venue be subject to authoritative recordkeeping equivalent to a registered transfer agent, making holder-rights parity enforceable in practice.
Establishes a measurable period during which investor context remains materially valid for consequential actions, requiring firms to revalidate assumptions when context changes, especially in tokenized and agentic workflows.
Separates asset/infrastructure revalidation (custody, token structure, venue operation) from investor-context revalidation (concentration, liquidity, risk capacity), ensuring both operational and investor-specific conditions are continuously monitored for material change.
Requires firms to maintain records that link prior state, material change, authority boundaries, and outcomes, enabling regulators to reconstruct decision environments and assess compliance in distributed tokenized markets.
Regulation should attach to the vault curator and vault token issuer roles, based on discretion, compensation, and portfolio composition, but not to the neutral protocol developer or administrator; vault interests are analyzed under Howey and Reves.
SEC and CFTC requirements for advisers, commodity trading advisors, investment companies, and commodity pool operators attach depending on the nature of the assets, discretion exercised, compensation, and whether U.S. public or offshore distribution is involved.
Recommendations include clarifying onchain vault custody, permitting multi-format funds, enabling secondary markets in tokenized fund shares, modernizing transfer agent registration, and building asset-level AML into tokenized fund interests.
Regulatory clarity alone is insufficient; institutions must continually verify that operational conditions (such as custody, asset backing, segregation, trading integrity, and cybersecurity) are supported by current evidence, especially after material changes.
Revalidation is essential: When material facts change (e.g., changes in custodians, reserves, platform architecture, liquidity, cybersecurity, or token structure), institutions must reassess whether prior conclusions remain valid based on updated evidence.
An implementation-verification layer should be integrated into digital-asset frameworks to identify material representations, supporting evidence, dependencies, downside ownership, conditions requiring renewed verification, and decision points for revalidation—complementing, not replacing, legal classification and regulatory controls
Regulation of crypto asset trading platforms (CTPs) should be modeled on the alternative trading systems (ATS) regime, but tailored for crypto markets, allowing for innovation and retail participation while maintaining investor protections.
CTPs should be permitted to notice-register with the SEC and trade both security/non-security pairs and purely non-security pairs, preventing market fragmentation and supporting efficient, consolidated markets.
Public disclosure requirements (Form ATS-N) should apply to CTPs trading NMS stocks only above a volume threshold; below this threshold, disclosures should be confidential, protecting proprietary information and encouraging innovation.
Andreessen Horowitz (a16z) and DeFi Education Fund (DEF)
The letter proposes a safe harbor from SEC exchange registration requirements for decentralized exchange protocols (DEXs) and DEX Apps, arguing that systems which do not function as traditional exchanges and do not present intermediary-related risks should not be subject to registration under the Securities Exchange Act of 1934.
The safe harbor criteria require DEXs and DEX Apps to be non-custodial, automated, permissionless, and credibly neutral, ensuring users retain control and eliminating centralized operator risks that exchange regulation is designed to address.
The proposal aligns with pending legislation (such as the CLARITY Act) and recent SEC staff guidance, emphasizing that neutral software tools enabling self-directed activity do not trigger exchange registration obligations, thereby supporting regulatory clarity and innovation.
