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
Ronald Hale

Letter to the Crypto Task Force 		Custody, Public Offerings, Regulatory Sandbox, Security Status, Tokenization, Trading
  • The proposed framework introduces the "Satoshi test" to classify crypto assets, focusing on investment of value, centralized control, expectation of returns, efforts of others, decentralization level, and transparency.
  • Regulatory components include guidelines for development and governance, classification of coins and tokens, oversight of economic activities like staking and mining, funding mechanisms, and standards for trading platforms and wallets.
  • Recommended investor protection measures include education campaigns, dispute resolution mechanisms, compensation funds or insurance for fraud victims, and international collaboration to address cross-border crypto issues.
     
Cindy Hart, EROS Risk Consulting

Letter to the Crypto Task Force 		Regulatory Sandbox, Security Status, Tokenization, Trading
  • Federal securities law and other federal and state regulations would apply based on the actual trading activity performed, requiring an interagency framework to factor in emerging risks.
  • The framework should consider identifying the full spectrum of risks, performing regulatory mapping, and providing interpretive guidance on activities that qualify for exemption.
  • Interagency participation is crucial in comprehensively identifying risks based on each agency's mission, including investment activity, registered investment advisors, financial crimes, accounting standards, safety and soundness, tax implications, and consumer regulations.
     
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.
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.
     
Dimitry Jean-Noel II

Digital Asset National Security 		Custody, Regulatory Sandbox, Security Status, Tokenization, Trading
  • Preserving Dollar Dominance: The rise of China's digital yuan and alternative settlement systems threatens the U.S. dollar's global reserve currency status. Stablecoin leadership is an essential countermeasure.
  • Regulatory Clarity as a Strategic Imperative: The U.S. must adopt a balanced, innovation-friendly regulatory framework to prevent talent and capital flight to competitor jurisdictions.
  • Financial Intelligence & Anti-Money Laundering (AML): Blockchain enhances financial oversight with real-time fraud detection, enhanced AML/KYC compliance, and improved sanction enforcement.
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.
Sara Hanks, CrowdCheck Law LLP

Letter to the Crypto Task Force 		Public Offerings, RFI Responses, Security Status, Tokenization, Trading
  • The document discusses the need for clear guidance on whether crypto assets fall within the definition of "security" and how they should be treated under GAAP.
  • It emphasizes that Regulation A is suitable for public offerings of tokenized traditional securities or novel crypto assets, without significant rulemaking.
  • The document highlights the importance of preemption of state laws for secondary trading of securities issued under Regulation A.
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.