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
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.
     
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

SEC Open Letter 		Regulatory Sandbox, Safe Harbor, Security Status, Tokenization, Trading
  • Adoption of ISO 20022 as the standard for digital asset transactions to enhance AML/KYC capabilities and align U.S. financial infrastructure with international payment standards.
  • Establishment of a unified, tiered regulatory framework for centralized entities, decentralized finance, and emerging digital assets.
  • Enactment of stablecoin legislation to ensure U.S. financial institutions can lead in global digital payments.
     
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.
     
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.
     
Chelsea Pizzola, Cumberland DRW

Re: Crypto Task Force Input: Security Status and Safe Harbor from Registration 		Safe Harbor, Security Status, Trading
  • Cumberland DRW LLC supports a safe harbor provision, provisionally named Rule 195, to address the complexities of applying the Howey test to cryptoassets.
  • Secondary-market cryptoasset transactions generally do not involve investment contracts, as they do not result in pooling of funds in a common enterprise.
  • Transactions in the native token of a decentralized network should not be viewed as securities transactions.
     
Jacob Clayton, SAGINT

Letter to the Crypto Task Force 		Custody, Regulatory Sandbox, Safe Harbor, Tokenization, Trading
  • Clear Asset Classification: Define when tokenized RWAs constitute securities under the Howey Test.
  • Streamlined Registration: Recommend a blockchain-specific registration pathway, potentially a safe harbor.
  • Custody and Market Rules: Modernize custody rules to include tokenized assets and adapt broker-dealer regulations.