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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.
The SEC should adopt a technology-neutral approach to regulating crypto assets, extending existing staff positions, no-action relief, and interpretative guidance applicable to non-tokenized funds to tokenized funds as well.
The SEC should clarify and update regulations regarding the custody of crypto assets, including eligibility of custodians and self-custody arrangements under Section 17(f) of the Investment Company Act of 1940.
Any new regulations should be principles-based, not prescriptive, and should avoid imposing unnecessary compliance burdens, especially on smaller entities and market entrants.
The letter urges the SEC to disclaim or clarify its BarnBridge DAO conclusions, arguing that smart‑contract pools—being software rather than legal persons—cannot “issue,” “sell,” or manage assets as required to qualify as investment companies under the Investment Company Act.
It requests clarification of what, if any, “securities” existed in BarnBridge, noting the order’s lack of analysis identifying which assets in the pools—including stablecoins and third‑party LP tokens—could lawfully be treated as “investment securities.”
It asks the SEC to confirm that EtherDelta is limited to its facts, emphasizing that its conclusions depended on Coburn’s unilateral control and do not apply to decentralized protocols lacking centralized custody, discretion, or governance authority.
The document recommends that custody of digital assets in decentralized markets should be regulated differently from traditional markets, emphasizing technology-neutral standards, robust cryptographic key management, and operational resilience, with tailored requirements for multi-signature, MPC custody, and self-custody arrangements.
The framework treats tokenization as an operational change, not a change in legal categorization, and urges regulators to adapt existing risk categories for tokenized securities, focusing on transparency, operational integrity, and dispute resolution regardless of ledger type.
Regulations should permit temporary commingling of customer assets for operational reasons (e.g., settlement, forks), but require prompt disaggregation, robust internal controls, audit trails, and prohibit rehypothecation except with explicit customer consent.
Charlie Uchill, CERES Coin, LLC - CERES Whitepaper Sep 2025
The GENIUS Act (signed July 18, 2025) provides a statutory definition of "payment stablecoins" and explicitly excludes securities issued by SEC-registered investment companies under Section 8(a) of the Investment Company Act of 1940, allowing CERES Coin to operate as a compliant security and not as a payment stablecoin.
CERES Coin is SEC-registered and patent-protected, enabling unrestricted peer-to-peer transfers and yield generation, while remaining outside the scope of securities laws applicable to non-yield-bearing, 1:1 USD-backed stablecoins, as clarified by the SEC’s April 4, 2025 Statement on Stablecoins.
CERES Coin’s structure and SDVOSB certification (Service-Disabled Veteran-Owned Small Business) enhance eligibility for federal and state set-aside contracts, aligning with government-focused missions and compliance with federal procurement regulations.
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.
Epistria, LLC - Proving What Didn’t Happen -SSRN Comprehensive Paper
Evidentiary compliance reframes legal compliance from procedural trust to cryptographic proof, enabling organizations to demonstrate not only what occurred but also what did not—addressing evidentiary gaps that traditional logs, attestations, and blockchains cannot fill.
Audit-Verifiable Compliance Receipts (AVCRs) and Relational Merkle Trees (RMTs) provide legally defensible proof of non-reachability, allowing entities to demonstrate that prohibited access paths or unauthorized interactions were structurally impossible.
Lifecycle receipts (CSTPs) and destruction proofs (EIVs) offer cryptographic evidence of compliance with data retention and deletion mandates (e.g., GDPR, HIPAA), enabling reconciliation of conflicting regulatory obligations through verifiable state transitions.
Epistria, LLC - When Digital Evidence of “Nothing Happened” Isn’t Good Enough
Courts lack clear standards for evaluating digital evidence that purports to prove a negative (e.g., no access, no transaction), making such evidence vulnerable to challenge and potentially unreliable in litigation.
As cryptographically generated “negative receipts” emerge, courts will need to assess them using technology-neutral criteria like authenticity, integrity, and chain of custody—while also developing new standards specific to negative proofs.
Portable digital artifacts proving non-occurrence may be discoverable, raising concerns about privilege waiver and confidentiality, especially when such artifacts reveal internal systems or were not created under legal direction.
Evidentiary asymmetry in crypto markets undermines enforcement because regulators cannot prove the absence of misconduct (e.g., wash trading, front-running), creating a persistent "evidentiary debt."
Cryptographic receipts of absence offer a novel compliance mechanism by mathematically attesting that prohibited activities did not occur within a defined scope, enhancing auditability and legal defensibility.
Mandating or endorsing such receipts would support the SEC’s goals of clear regulatory boundaries, tailored disclosures, and stronger investor protections through verifiable compliance.
The proposal applies the Howey Test to IoT-enabled tokens, affirming that most tokenized physical assets—especially those offering fractional ownership and income rights—qualify as securities under U.S. federal law, thereby triggering SEC jurisdiction and compliance obligations.
The framework mandates that smart contracts embed securities law requirements, including automated enforcement of Regulation D holding periods, accredited investor verification, and transfer restrictions, ensuring immutable compliance with federal securities regulations.
A proposed Self-Regulatory Organization (SRO), under SEC supervision, would certify and oversee oracle operators, requiring them to meet technical, operational, and financial standards, including minimum capitalization, bonding, and compliance with AML/KYC and reporting obligations.
Bank Policy Institute, Association of Global Custodians, and Financial Services Forum
The SEC should not expand the definition of “qualified custodian” to include entities like state-chartered trust companies unless they are subject to regulatory oversight and prudential standards equivalent to those applied to banks.
Investment advisers should not be permitted to self-custody client crypto assets without full compliance with the Investment Advisers Act and related custody rules, as this would expose investors to heightened risks and conflicts of interest.
Any changes to the custody framework for crypto assets must maintain the core principles of asset segregation, separation of functions, and proper control to ensure investor protection and market stability.
