Crypto Task Force Written Input

• Douro Labs requests SEC guidance clarifying that securities laws do not preclude the use of pricing data from decentralized oracle networks for asset valuation, provided the networks meet quality, transparency, and resiliency standards.
• The letter emphasizes that decentralized oracle networks can enhance competition, efficiency, and investor protection in the financial data market by providing comprehensive, trustworthy, and affordable pricing data.
• Douro Labs suggests that the SEC issue interdivisional FAQs to define decentralized oracle networks, outline their threshold attributes, and confirm their permissible use for regulatory calculations under existing securities laws.

• Regulatory frameworks for tokenized securities must preserve core investor protections—such as best execution, custody safeguards, and conflict-of-interest disclosures—by adapting existing securities laws rather than bypassing them.
• Any innovation exemption or regulatory sandbox must include public input, clear disclosure requirements, and structural guardrails (e.g., transaction caps, duration limits, and exit criteria) to prevent regulatory arbitrage and protect market integrity.
• Tokenization does not alter the legal nature of an asset; thus, tokenized securities and derivatives must remain subject to existing securities and derivatives laws, with regulatory treatment based on economic substance rather than technological form.

• FIA PTG urges the SEC to formally recognize that the Howey test must be applied on a transaction-by-transaction basis, and that most secondary-market crypto transactions do not constitute securities transactions unless under exceptional circumstances.
• The group supports a safe harbor framework, as proposed by Commissioner Peirce, to provide legal certainty for crypto projects during their development phase, emphasizing decentralization based on control rather than ownership thresholds.
• FIA PTG recommends that tokenized assets and stablecoins be explicitly recognized as eligible collateral under SEC rules, provided appropriate risk management policies are in place.

• The SEC should not create a new registration category for platforms trading tokenized securities; instead, it should adapt existing frameworks (e.g., NSE, ATS) to accommodate blockchain-based trading infrastructure.
• The SEC should clarify or amend rules to permit side-by-side and pairs trading of securities and non-securities (e.g., stablecoins, bitcoin) on a single platform, treating such transactions as securities trades when appropriate.
• A principles-based approach to best execution should be adopted for both offchain and onchain environments, emphasizing transparency, operational integrity, and flexibility in execution standards.

Proposed legislative language for an amendment to the Securities Act of 1933 that would codify an exemption for certain transactions relating to DePIN. This proposed legislative language includes a definition of DePIN and the requirements for qualifying for such an exemption.

• Clarify that decentralized finance protocols do not constitute "exchanges" or "broker-dealers" under the Exchange Act if there is no meaningful human intermediation or custodial control.
• Establish a safe harbor framework for DeFi trading and lending protocols that are progressing toward decentralization, modeled on Commissioner Peirce’s proposed Rule 195.
• Exclude neutral frontend interfaces from broker-dealer rules if they merely facilitate user access to DeFi protocols without exerting control over user assets or transaction execution.
   

• The letter requests the SEC to issue interpretive guidance or no-action letters for tokenized insurance-backed bonds to provide legal clarity and support innovation.
• It proposes the creation of a regulatory sandbox or pilot program for developing and testing tokenized insurance products in a controlled environment.
• The letter recommends updating the SEC's "Framework for 'Investment Contract' Analysis of Digital Assets" to explicitly address tokenized real-world assets like insurance products.
   

• Fidelity supports the withdrawal of the Joint Staff Statement on Broker-Dealer Custody of Digital Asset Securities and recommends identifying best practices for broker-dealers that custody digital assets.
• Fidelity urges the SEC to clarify that a broker-dealer may offer its customers a fully-paid lending program for digital assets.
• Fidelity recommends establishing a safe harbor to support secondary trading of digital assets that are not investment contracts.

• The letter urges the SEC to clarify that tokenizing or creating a cryptographically authenticated digital representation of an asset does not convert a non-securities transaction into a securities transaction.
• TDC recommends that the SEC issue formal guidance and commence rulemaking to exempt bona fide consumer sales of goods and services (including NFTs) from securities laws where no profit or equity interest is offered and there is no contractual obligation for repayment.
• TDC suggests that the SEC provide formal guidance on the application of securities laws to stablecoins and wrapped tokens, ensuring that these digital assets are not unnecessarily classified as securities or investment contracts.

• Establishment of a provisional EUD Token Certification process for self-certifying tokens under the CLARITY Act.
• Implementation of a No-Action Letter mechanism to confirm SEC non-enforcement for compliant EUD token projects.
• Recognition of EUD tokens as non-securities, allowing their use for payments, rewards, and on-platform utility.