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
Solana Policy Institute (by Lowenstein Sander LLP)

Public blockchain infrastructure for on-chain equities issuance and trading 		Custody, Public Offerings, Regulatory Sandbox, Safe Harbor, Security Status, Tokenization, Trading
  • Covered Blockchain Networks and Validators do not fall within the definitions of "clearing agencies," "exchanges," or "brokers" under the Exchange Act.
  • Validators on a Covered Blockchain Network do not act as intermediaries in the payment or delivery of securities and do not perform the intermediary functions characteristic of a CCP or clearing agency.
  • The on-chain infrastructure ensures that securities transactions are direct, transparent, and settled on a gross, peer-to-peer basis, with no centralized intermediation, custody, or netting.
Solana Policy Institute

Response to the Crypto Task Force’s Request for Comment: Regarding Project Open 		Custody, Public Offerings, Regulatory Sandbox, Safe Harbor, Security Status, Tokenization, Trading
  • The Solana Policy Institute argues that validators on the Solana network do not trigger registration requirements under securities laws.
  • Phantom Technologies Inc. asserts that non-custodial wallet software does not require broker-dealer registration.
  • Orca Creative claims that its AMM protocols do not function as securities intermediaries.
Alan Konevsky, tZERO Group, Inc.

Re: Crypto Task Force Meeting with tZERO Group, Inc. – Follow-Up Notes 		Custody, Safe Harbor, Security Status, Trading
  • Establish permanent guidance and rules for broker-dealer self-custody of digital asset securities, building on the SPBD Statement.
  • Clarify the manner in which broker-dealers can retail, custody, and quote non-security crypto assets on alternative trading systems.
  • Issue new guidance to clarify the definition of a digital asset security and its compliance requirements.
Nilmini Rubin, Hedera

Subject: Comments on the SEC Crypto Task Force’s Questions Concerning Safe Harbor from Registration 		RFI Responses, Safe Harbor, Security Status, Tokenization
  • The Hedera Council supports the establishment of a token safe harbor to provide regulatory certainty and transparency for new and existing companies in the digital asset industry.
  • The Council suggests modifying the definition of Network Maturity to include decentralized governance coordinated through a legal entity, termed as a "Decentralized Wrapper," to protect participants from general liability.
  • The Council advocates for retroactive availability of the safe harbor contingent upon full compliance with disclosure requirements to enhance market transparency and investor protection.
Kecheng Lai, Knowpia Inc.

Recommendation Letter - From End User Distribution to Social Mining: Evolving Frameworks for Token Dissemination and Community Engagement in the Digital Asset Economy 		Safe Harbor, Security Status, Tokenization, Trading
  • The "End User Distribution" concept is designed to distribute digital commodities without constituting an offer or sale of a security or commodity.
  • "Social Mining" allows users to earn tokens through non-financial contributions, directly linking token issuance to platform value creation.
  • The STO+ framework proposes a dual-nature token model, where tokens transition from utility to security status based on specific conditions.
Rebecca Kacaba, DealMaker

Re: Securities and Exchange Commission’s (“SEC” or “Commission”) Crypto Task Force (the “Task Force”) Invitation For Public Commentary Regarding Public Offerings Of Crypto Assets, Safe Harbor From Registration and Tokenization 		Public Offerings, RFI Responses, Safe Harbor, Tokenization, Trading
  • DealMaker emphasizes that Regulation A provides a strong foundation for crypto asset offerings and suggests removing the $75 million cap to better accommodate high-growth, capital-intensive sectors.
  • The letter advocates for adaptable disclosure requirements tailored to crypto assets, focusing on risk and ongoing managerial efforts to enhance investor protection.
  • DealMaker supports clear guidance on secondary market trading for tokenized assets, including federal preemption of state law compliance for secondary trading through registered systems.
Patrick Kirby, Crypto Council for Innovation

RE: Comments on the SEC Crypto Task Force’s Questions Concerning the Security Status of Crypto Assets 		RFI Responses, Safe Harbor, Security Status, Tokenization, Trading
  • The Crypto Council for Innovation (CCI) emphasizes the need for comprehensive legislation for digital assets and blockchain technology to provide clarity, allow for responsible innovation, and protect investors.
  • CCI proposes a regulatory taxonomy for crypto assets based on control, financial returns, and standardization, suggesting that many crypto assets do not implicate securities laws and should not be regulated under them.
  • CCI highlights the importance of recognizing the transformative potential of crypto in improving and empowering the lives of global consumers and encourages collaborative engagement between regulators and the industry.
     
Jacklyn DeMar, The Anti-Fraud Coalition

Letter to the Crypto Task Force 		Regulatory Sandbox, RFI Responses, Safe Harbor, Security Status, Trading
  • The TAF Coalition recommends that the SEC recognize some digital assets as securities and allocate sufficient resources to enforce crypto-related securities fraud.
  • The SEC's whistleblower program has been effective in identifying and prosecuting crypto fraud, resulting in significant monetary penalties and returns to harmed investors.
  • The SEC is uniquely positioned to combat securities fraud in the crypto industry due to its budget, expertise, and enforcement capabilities.
Ripple

Letter to the Crypto Task Force 		Safe Harbor, Security Status, Trading
  • Judge Torres ruled that XRP itself is not a security, even though Ripple had previously sold some units of XRP as part of investment contracts.
  • The SEC's guidance should adhere to existing law to reduce market confusion and avoid reliance on vague concepts like "fully functional" or "sufficiently decentralized."
  • A well-designed safe harbor could provide meaningful protection to good-faith actors navigating genuine legal uncertainty.
Charles W. Mooney, Jr., University of Pennsylvania Carey Law School

Potential Exemptive Order: Tokenization of Traditional Securities 		Custody, Regulatory Sandbox, Safe Harbor, Tokenization, Trading
  • The potential SEC exemptive order for tokenized securities could unintentionally entrench the monopoly of the current intermediated securities holding infrastructure.
  • The current intermediated holding system imposes substantial costs on issuers and investors, which could be alleviated by a direct-holding model.
  • An independent study is recommended to assess the current securities holding infrastructure and explore potential reforms, including the implementation of a direct-holding model.