An official website of the United States government
Here’s how you know
Official websites use .gov
A .gov website belongs to an official government organization in the United States.
Secure .gov websites use HTTPS
A lock
()
or https:// means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.
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 SEC should address investor protection and market structure issues involving digital asset securities facilitated by off-chain transactions on trading platforms.
The SEC and CFTC should jointly authorize and regulate a digital asset repository of transactions (DART) to record both on-chain and off-chain transactions and associated customer ownership.
The SEC should revise the Exchange Act rules to require timely reporting of all transactions deemed digital asset securities to enhance market oversight.
STO+ tokens are designed to mirror preferred stock characteristics, entitling holders to dividend distributions without direct ownership or operational management rights.
All token transactions are recorded transparently on decentralized blockchain smart contracts, ensuring a fully auditable, secure, and traceable transaction history.
Trading of STO+ tokens will occur exclusively on U.S.-based, SEC-compliant token exchanges to ensure ongoing regulatory adherence and oversight.
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.
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.
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.
The document outlines the regulatory framework for crypto assets, emphasizing the need for clear guidelines to ensure compliance and protect investors.
It discusses the importance of establishing a regulatory sandbox to foster innovation while maintaining oversight.
The document highlights the necessity of defining the security status of various crypto assets to provide legal clarity.
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.
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.
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.
