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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.
Wallet providers performing broker-dealer functions for tokenized securities must register under the Exchange Act; exemptions or no-action relief are inappropriate as they undermine investor protection and market integrity.
Clear regulatory distinctions are required between true non-custodial wallet services and models involving custody or safekeeping, as the latter may trigger broker-dealer or other regulatory obligations.
Regulatory clarity should be achieved through durable, notice-and-comment rulemaking that defines when wallet providers are or are not brokers, rather than through ad hoc exemptions or safe harbors.
Charles W. Mooney, Jr., New Hampshire Commission on Uniform State Laws
Custody, Public Offerings, Safe Harbor, Security Status, Tokenization, Trading
The SEC should mandate DTCC cooperation to enable near real-time movement of registered ownership between direct and intermediated holding, creating a level playing field for tokenized securities.
Infrastructure reform is necessary to remove regulatory and market barriers to direct holding and self-custody, ensuring benefits equivalent to intermediated accounts for direct holders.
The SEC should request proposals for a reformed infrastructure and clarify broker-dealer authority to execute transfers of directly held securities for trading in traditional markets.
Miller Whitehouse-Levine and Patrick Wilson, Solana Policy Institute
The SEC should adopt a technology-neutral framework that distinguishes true intermediaries (those holding funds or controlling execution) from developers of non-custodial, non-discretionary software tools.
Interpretive guidance should confirm that publishing or maintaining non-custodial software (wallets, smart contracts, passive interfaces) does not constitute operating an exchange, clearing agency, or effecting transactions for others.
The definition of “exchange” should exclude non-custodial, non-discretionary software that does not perform marketplace functions, ensuring communication layers and read-only tools remain outside regulatory scope.
The SEC should apply existing statutory definitions of “exchange,” “broker,” and “dealer” to DeFi participants and assess compliance under the Securities Exchange Act of 1934.
The SEC lacks authority and policy basis to grant broad exemptive relief from these definitions, as doing so would undermine investor protections and market resiliency measures.
Instead of disapplying the regulatory framework, the SEC should conduct rule-by-rule analysis and address impediments through notice-and-comment rulemaking to preserve investor protections.
Zack Tickman, Claude & Friends: Risk Analytics Research Group
Custody, RFI Responses, Safe Harbor, Security Status
Zcash and Aleo rely on zkSNARKs requiring a “trusted setup,” which introduces a permanent trust assumption. If the setup’s entropy (“toxic waste”) is not securely destroyed, it could allow undetectable token counterfeiting, undermining supply integrity.
Zcash’s opt-in privacy model results in most transactions being transparent, enabling deanonymization through statistical analysis. This undermines its claim to privacy-preserving status and exposes users to surveillance risks.
Aleo’s programmable privacy increases protocol complexity, which has led to real-world data leaks (e.g., unencrypted KYC data). This complexity heightens the likelihood of implementation flaws, expanding the attack surface and compromising user privacy.
Securities Industry and Financial Markets Association (SIFMA)
Tokenized securities traded via DeFi or CeDeFi platforms must comply with U.S. securities laws, including the Exchange Act, regardless of claims of decentralization or minimal intermediary involvement.
A clear and nuanced taxonomy is essential to distinguish between natively issued digital securities, wrapped tokens, SBS, and non-security instruments, ensuring proper application of securities laws and investor protections.
Fragmentation between tokenized and traditional securities markets poses risks to market integrity, and regulators must ensure fungibility, consistent trade reporting, and integration with existing infrastructures like Reg NMS, CAT, and SIPC.
The "Chains of Trust" model enables cryptographic self-certification of digital identities and data, which can enhance customer due diligence and reduce synthetic identity fraud in digital asset markets.
Institutions can use VDCs to attest to a customer’s compliance status without transmitting sensitive personal data repeatedly, supporting privacy and interoperability across financial institutions.
Linking legal entity identifiers to VDCs provides cryptographic proofs of beneficial ownership, while immutable provenance records offer regulators and law enforcement reliable audit trails for supervisory and enforcement purposes.
The SEC has jurisdiction over leveraged crypto ETFs and related securities products, and has previously blocked filings for extreme 5x leveraged ETFs to protect investors.
Leveraged crypto instruments offered to U.S. persons via unregistered platforms may fall under SEC oversight, especially when tied to assets potentially classified as securities.
Joint SEC-CFTC efforts in 2025 have initiated regulation of onshore perpetual contracts with leverage limits, but offshore platforms remain largely unregulated, posing risks to U.S. retail investors.
DeFi Education Fund, Andreessen Horowitz, The Digital Chamber, Orca Creative, J.W. Verret, and Uniswap Foundation
The letter argues that Citadel’s attempt to classify all entities and technologies involved in DeFi transactions as SEC-registered intermediaries is legally flawed, as autonomous software and developers without custody or control over user assets do not meet the statutory definitions of “broker” or “dealer.”
The signatories assert that expanding the definitions of “exchange” and “broker-dealer” to include DeFi protocols exceeds the SEC’s statutory authority and risks misclassifying non-intermediary software infrastructure, undermining innovation and regulatory clarity.
The letter supports notice-and-comment rulemaking for tokenized equities but urges the SEC to adopt frameworks—such as safe harbors—that distinguish between centralized and decentralized systems, ensuring that only entities posing traditional risks are subject to registration.
The framework proposes that Solana-based ETP issuers provide periodic public disclosures detailing validator allocations, concentration policies, and incidents, enabling the SEC to monitor systemic risks without prescribing protocol-level changes.
The SEC is urged to formally acknowledge that stake concentration in Solana ETPs poses material investor protection risks, including transaction censorship, governance capture, and network halts, thereby falling squarely within its jurisdiction.
Validators receiving ETP stake must disclose governance voting intentions and maintain independence from issuers and custodians to prevent proxy-advisory style influence and ensure fair market access.
