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.
Securitize’s issuer-sponsored tokenization model ensures that tokenized public equities are issued directly by the issuer, conferring the same legal rights (voting, dividends, corporate actions) as traditional securities, with all investors KYC-verified and transfers governed by smart contracts for compliance.
Wrapped token and derivative models introduce additional counterparty risk, lack equivalent ownership rights, and often fail to meet KYC/AML and transfer restriction requirements, raising significant regulatory concerns and potential for non-compliance with U.S. securities laws.
Securitize’s model operates fully within existing securities regulations and does not seek exemptions, contrasting with other models that may rely on regulatory arbitrage or require exemptive relief, and advocates for modernization of certain rules to accommodate blockchain solutions.
Private blockchains operated by companies should be governed by internal corporate structures (e.g., boards), ensuring accountability and operational continuity.
Coins used within private blockchains for governance and utility purposes should not be classified as securities if not offered to institutional investors or traded on public exchanges.
Transparent transaction visibility on private blockchains can reduce the need for external regulatory oversight while maintaining stakeholder trust.
The proposal introduces a phased regulatory sandbox supervised initially by the SEC, with potential pathways to formal safe harbor protections and expedited registration for compliant participants—offering legal clarity and reduced regulatory friction for innovators.
The framework explicitly structures "EduTokens" as non-transferable, non-speculative utility tokens to avoid classification as securities under the Howey Test, referencing precedents like SEC v. Kik and SEC v. Telegram, and aligning with SEC no-action letters.
The proposal outlines a phased inter-agency model led by the SEC, with initial jurisdiction confined to areas of clear SEC authority (e.g., Regulation D offerings), while preserving federal supremacy in conflicts with state law under Article VI of the U.S. Constitution.
Proposes the creation of a Federal Reserve HBAR Reserve & Lending Facility (HRLF), enabling HBAR-denominated loans for infrastructure, energy, and housing, with repayment terms and custody hardened under a Post-Quantum Financial Infrastructure Framework (PQFIF).
Assigns the SEC responsibility for monitoring issuance, custody, and lending structures involving HBAR, ensuring regulatory compliance within a post-blockchain framework.
Advocates for a national program (“HBAR in American Homes”) encouraging U.S. households to accumulate HBAR as a pro-dollar collateral layer, aiming to decentralize supply and reinforce U.S. monetary sovereignty.
Lilya Tessler and Kate Lashley, Sidley Austin LLP on behalf of Ava Labs, Inc. and Owl Explains
Ava Labs proposes a new regulatory category—“Protocol Tokens”—defined as intangible, commercially fungible assets integral to the functioning of a protocol. These tokens should not be classified as securities, regardless of whether they are in a pre-functionality or functional state.
The SEC should adopt a rulemaking framework that presumes offers and sales of Pre-Functionality Protocol Tokens are investment contracts, but allows for rebuttal and provides a new exemption (“Regulation PT”) with tailored disclosure, AML/KYC, and filing requirements.
SEC-registered intermediaries (e.g., broker-dealers, ATSs, NSEs) should be permitted to support Protocol Token activities under existing frameworks, with targeted amendments and interpretive guidance. A transitional grace period should allow such activities pending final rulemaking.
Custody, Public Offerings, Safe Harbor, Security Status, Tokenization, Trading
Paradigm urges the SEC to issue interpretive guidance confirming that tokenized securities retain their status as securities under federal law, ensuring that blockchain-based issuance does not alter legal obligations under the Securities Act or Exchange Act.
The letter recommends that the SEC clarify and potentially revise transfer agent and recordkeeping rules to accommodate blockchain-based systems, including allowing issuers to act as their own transfer agents and recognizing distributed ledgers as official books and records.
Paradigm proposes updates to registration forms (e.g., Form S-1) and ongoing disclosure requirements to reflect the technical specifics of tokenized securities, including smart contract features, custody mechanisms, and onchain governance, while maintaining investor protection standards.
The OTCM Protocol employs a novel “Howey Shield” framework to ensure its tokens do not meet the definition of a security under the Howey Test, emphasizing the absence of profit expectation and managerial reliance, thus classifying tokens as commodities.
The protocol integrates SEC-registered intermediaries (e.g., Empire Stock Transfer) for custody and compliance, aligning with February 2025 SEC guidance on meme tokens and reinforcing investor protection through professional custody and full KYC/AML procedures.
The OTCM model is proposed as a regulatory template for future safe harbor provisions, demonstrating how asset-backed, entertainment-purposed tokens can operate within existing legal frameworks while revitalizing illiquid markets.
The framework proposes a newly chartered nonprofit SRO operating under SEC oversight, with delegated authority for rulemaking, certification, and sandbox administration, subject to SEC approval and audit.
Introduces a new class of digital securities whose terms evolve based on real-time data from certified oracles (e.g., ESG metrics), with all changes immutably recorded and auditable via a Civic Transparency Portal.
Establishes a legally controlled environment for multi-jurisdictional testing of digital asset components, enabling localized regulatory validation and cross-border interoperability under SEC and SRO governance.
James Q. Walker, Lowell D. Ness, Arthur S. Greenspan, Valeska Pederson Hintz, Zeeve Rose, Kiran Gill, Perkins Coie LLP
Custody, Public Offerings, Safe Harbor, Security Status, Tokenization, Trading
The SEC’s Division of Corporation Finance concluded that proof-of-work (POW) mining activities do not constitute the offer and sale of securities under federal securities laws.
The proof-of-stake (POS) validation process should not be considered an investment contract security under the Howey test, as rewards are compensation for technical validation services, not profits based on the efforts of others.
The issuance of liquid staking tokens (LSTs) should not be considered the offer or sale of a new security, as they are temporary stand-ins for the original staked crypto assets.
Public Offerings, RFI Responses, Safe Harbor, Security Status, Tokenization, Trading
Proposes a tailored safe harbor under Category 3 of Regulation S for token offerings, addressing challenges like continuous token distributions and flowback restrictions.
Suggests updates to Category 1 of Regulation S to make it workable for FPIs of crypto assets, including adjustments to the "substantial U.S. market interest" test and Exchange Act registration thresholds.
Recommends digital-native compliance methods such as geoblocking, on-chain controls, and electronic purchaser certifications to satisfy Regulation S requirements for crypto assets.
