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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.
DEF and UF support Commissioner Peirce's proposal for a non-exclusive safe harbor (Rule 195) that would provide a time-limited exemption from registration requirements under the Securities Act of 1933 for offers and sales of cryptocurrency assets during the development of a blockchain project.
DEF and UF argue that a DAO with dispersed control over governance should not have its network tokens or transactions considered as securities under the Howey test.
DEF and UF emphasize that blockchain records eliminate informational asymmetries, making traditional disclosure requirements unnecessary for sufficiently decentralized networks.
The report argues that airdrops should not be classified as securities transactions under the Howey test, as they do not involve an investment of money, lack a common enterprise, and do not create an expectation of profits derived from the efforts of others.
It highlights the adverse economic impact of geoblocking U.S. users from airdrops, estimating significant revenue and tax losses due to restrictive U.S. policies.
The report recommends establishing a regulatory safe harbor for airdrops that are not intended as fundraising tools, to encourage innovation and provide clear guidelines for compliance.
The letter urges the Commission to align its safe harbor efforts with similar provisions in market structure legislation to avoid regulatory confusion.
It requests interpretive guidance clarifying that common communications about network milestones do not create a reasonable expectation of profit and do not constitute investment contracts.
The letter emphasizes that crypto assets sold under the safe harbor should not be considered securities themselves, and secondary trading of these assets should not be treated as investment contract transactions.
Non-custodial trading interfaces (NTIs) should not be considered "brokers" or "exchanges" under federal securities laws as they do not control or custody user funds, solicit transactions, or provide personalized investment recommendations.
NTIs act solely as technological tools that enable users to draft and optimize transactions without intermediating trades or exercising control over the underlying protocol.
The SEC is requested to issue guidance confirming that NTIs are not required to register as brokers or exchanges, ensuring clarity and fostering innovation in non-custodial platforms.
The Global Digital Assets & Cryptocurrency Association
Public Offerings, Regulatory Sandbox, Safe Harbor, Security Status, Tokenization, Trading
The Information Guidelines propose a comprehensive disclosure framework for digital asset tokens, aiming to establish transparency and consistency in information disclosure to enable informed decision-making in the digital asset market.
The guidelines align with existing U.S. laws and regulations, as well as global regulatory regimes like MiCA, to promote consistent global adoption of information disclosure practices.
The guidelines provide flexibility for adaptation to different regulatory regimes and industry standards, supporting innovation, market integrity, and capital formation.
Blaine Luetkemeyer, American Consumer and Investor Institute
The SEC should provide clear guidance and a streamlined no-action path for blockchain-based clearance and settlement systems to facilitate innovation without compromising regulatory oversight.
The SEC should clarify that when a token represents an already-registered or exempt security, the token itself does not require separate SEC registration, reducing regulatory friction while maintaining oversight over the underlying financial instrument.
The SEC should establish a formal registration pathway for staking services that do not fit neatly within existing securities frameworks, including modified reporting requirements that address staking-specific concerns.
Interop Labs urges the SEC to distinguish between centralized and decentralized interoperability networks and to issue guidance or a safe harbor exempting decentralized, non-custodial systems from intermediary registration requirements.
The document proposes principles for evaluating decentralization, including open-source protocols, public accessibility, permissionless operation, immutability, and distributed governance.
Interop Labs emphasizes that decentralized interoperability networks reduce systemic vulnerabilities and uphold investor protections through protocol-level safeguards.
The SEC should confirm the scope of existing custody rules with respect to crypto assets, as many crypto assets do not fall within the definition of "securities" or "client funds" under the Advisers Act.
The SEC should expand the definition of "qualified custodian" to include state-chartered trust companies and other entities that meet substantially similar standards.
RIAs should be permitted to self-custody crypto asset securities when no qualified custodian is available, with appropriate safeguards and disclosures.
Anderson P.C. supports an activity-based regulatory framework over asset-based classification, advocating for the bifurcation of "security" definitions under the '33 and '34 Acts to provide clearer compliance pathways for digital assets.
The letter urges the SEC to issue interpretive guidance affirming decentralized oracle networks (DONs) as legitimate and reliable price benchmarks under fair value accounting standards and SEC rules.
Anderson P.C. recommends a tailored disclosure framework for network tokens, emphasizing transparency about tokenomics, governance, security audits, contributor incentives, and decentralization milestones.
The utility and real-world use case of a digital asset should be a primary determining factor in whether the asset is deemed a "security" under U.S. federal securities laws.
Digital assets with utility and real-world use cases are more appropriately regulated by the Commodity Futures Trading Commission (CFTC) rather than the Securities and Exchange Commission (SEC).
The regulatory approach should avoid excessively complicated, multi-part legal tests and instead focus on practical, usable, and reasonable legal standards.
