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: Contribution to Safe Harbor & Security Status 		Public Offerings, Safe Harbor, Security Status
  • Vanguard Global Holdings LLC supports the SEC initiative to create a clear regulatory framework for the cryptocurrency industry.
  • The company advocates for the creation of a "Safe Harbor" for crypto assets to provide a secure platform for ICOs and IDOs.
  • Vanguard Global Holdings LLC proposes that cryptographic tokens should be considered commodities rather than securities.
     
John Schoenecker, Taxbit

RE: Written Input to the Crypto Task Force 		Custody, RFI Responses, Safe Harbor, Security Status, Trading
  • The PROOF Act introduced by Senators Tillis and Hickenlooper requires digital asset exchanges and custodians to submit periodic proof of reserves (PoR) inspections by a neutral third party to the Treasury.
  • Real-time on-chain PoR reporting can prevent misappropriation of assets, as demonstrated by the FTX scandal.
  • Auditors of digital assets should verify them by tracking and confirming their existence on entity-owned and controlled blockchain wallet addresses.
Andreessen Horowitz, a16z

Re: Recommendations Regarding a Safe Harbor and Crowdfunding Regime for Collectible Tokens (NFTs) 		RFI Responses, Safe Harbor, Security Status
  • The document recommends the creation of a safe harbor to exclude ordinary transactions of collectible tokens from federal securities laws.
  • It proposes new crowdfunding regulations for transactions of collectible tokens that may engender risks addressed by federal securities laws.
  • The document emphasizes that collectible tokens generally do not have the inherent characteristics of securities and should not be subject to federal securities laws.
Figure Markets

Submission to SEC Crypto Task Force 		Crypto Lending, Custody, Public Offerings, Regulatory Sandbox, RFI Responses, Safe Harbor, Security Status, Tokenization, Trading
  • The SEC should clarify the security status of crypto assets like stablecoins, wrapped tokens, and NFTs to foster innovation and protect investors.
  • Tailored disclosure requirements for specific non-security crypto asset categories should be established to ensure transparency and investor protection.
  • A safe harbor provision, such as Rule 195, should be considered to encourage blockchain development within regulatory parameters.
Alternative Investment Management Association (AIMA)

Re: AIMA written input to the SEC’s Crypto Task Force 		Crypto ETPs, Crypto Lending, Custody, Public Offerings, Regulatory Sandbox, RFI Responses, Safe Harbor, Security Status, Tokenization, Trading
  • AIMA recommends the SEC adopt a clear, principles-based regulatory approach toward crypto assets, recognizing their diverse nature and use cases.
  • AIMA urges the SEC to provide clear custody guidelines for RIAs and other institutional investors, emphasizing the need to withdraw the proposed Safeguarding Rule.
  • AIMA suggests that the SEC consider adopting a version of Rule 195 to provide clarity on when a token sale ceases to be an investment contract and when a network achieves sufficient decentralization.
Asia Web3 Alliance Japan

Proposal for U.S.–Japan Collaboration on Tokenized Economy and Web3 Innovation 		Regulatory Sandbox, Safe Harbor, Tokenization, Trading
  • The proposal emphasizes the need for regulatory clarity and interoperability of frameworks to support the development of compliant and inclusive tokenized markets.
  • It suggests the creation of a U.S.–Japan Tokenization and Web3 Regulatory Collaboration Program to harmonize token classification frameworks and promote regulatory interoperability.
  • The proposal advocates for the introduction of a safe harbor mechanism in Japan, similar to the U.S. model, to allow startups to test projects in a controlled sandbox environment with a path to full compliance.
Lido Labs Foundation

Re: Response to RFI of Crypto Task Force 		RFI Responses, Safe Harbor, Security Status
  • Governance tokens provide essential utility for decentralized blockchain networks and should not be classified as securities.
  • Liquid staking tokens (LSTs) are akin to warehouse receipts for commodities and do not implicate federal securities laws.
  • The SEC should provide legal clarity on the status of LSTs to ensure market certainty.
Ripple

Letter to the Crypto Task Force 		Custody, Regulatory Sandbox, RFI Responses, Safe Harbor, Security Status, Tokenization, Trading
  • The SEC lacks authority over most digital assets and transactions involving them, as it can only regulate "securities" and transactions involving securities as defined by the Securities Act of 1933 and the Securities Exchange Act of 1934.
  • The application of the Howey test under the prior administration was distorted, leading to market disruption and driving innovation outside the United States.
  • The SEC should confirm that staking and yield-generating arrangements dependent on the programmatic functioning of a public, permissionless network that do not involve a definable issuer or counterparty making investment commitments are not considered securities.
Lewis Cohen, Cahill Gordon & Reindel LLP

What We Talk About When We Talk About (Tokens) 		Public Offerings, RFI Responses, Safe Harbor, Security Status
  • The absence of a clear regulatory perimeter for crypto asset activity in the U.S. has resulted in market structure distortions and challenges for price discovery in the crypto asset sector.
  • Fundraising transactions involving crypto assets intended to develop, improve, or promote a blockchain system must be registered with the Commission or exempt from registration.
  • The Commission should consider adopting safe harbor guidance for subsequent sales of crypto assets by project teams or insiders, subject to certain conditions.
Patrick Daugherty, Foley & Lardner LLP

Re: Restatement of the Howey Common Law of Crypto Assets; Recommendations 		Safe Harbor, Security Status, Trading
  • The SEC should ratify "When Howey Met Gary (Plastic)" as a correct interpretation of the Howey test as applied to crypto assets and revise the FinHub Framework to clearly indicate which combinations of factors provide a strong indication that the asset is an investment contract security.
  • The SEC should make it clear that its existing no-action letters on crypto assets no longer reflect the expansive view of Howey and endorse the legality of publicly-traded "utility tokens" as other market regulators do.
  • The SEC should issue guidance about the proper use of Securities Act registration exemptions such as Rule 144, Regulation D, and Regulation S relative to the offer and sale of crypto assets that are offered and sold as part of investment contracts.