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
Andreessen Horowitz, a16z

Re: Comments on the SEC Crypto Task Force’s Questions Concerning the Custody of Crypto Assets 		Custody, RFI Responses, Security Status

  • The Commission should provide new guidance to facilitate custody arrangements for crypto assets, even if only as a temporary measure until it issues new rules.

  • The Commission should permit RIAs to self-custody security tokens and clarify that the self-custody of crypto assets by RIAs would not conflict with the Custody Rule or fiduciary duties.

  • Custodial requirements should clearly distinguish between different categories of crypto assets while ensuring that non-security crypto assets are custodied in a manner that is substantially as secure as crypto asset securities.
Chelsea Pizzola, Cumberland DRW

Re: Crypto Task Force Input: Secondary-Market Trading 		RFI Responses, Safe Harbor, Security Status, Tokenization, Trading

  • Cumberland believes that many secondary-market transactions in native crypto assets are not securities transactions, even if the crypto asset was initially offered and sold as part of an investment contract.

  • Cumberland supports adoption of Commissioner Peirce’s proposed safe harbor or similar relief to alleviate concerns for primary issuance and secondary-market trading of Natively Digital Securities.

  • Cumberland suggests that the SEC should consider providing interpretive or no-action relief from certain aspects of the tests for determining whether securities have a ready market, limited
Margaret Rosenfeld, Everstake, Inc.

Letter to the Crypto Task Force 		Custody, RFI Responses, Safe Harbor, Security Status, Trading

  • Everstake requests clear guidance affirming that staking and appropriately structured non-custodial staking services do not constitute securities offerings.
  • The letter outlines why staking and non-custodial staking services meet the criteria of an investment contract under the Howey Test.
  • Everstake urges the Commission to issue formal guidance regarding the application of federal securities laws to non-custodial staking services.
     
Kecheng Lai, Knowpia Inc.

RE: The Future is Here, Now! A Comprehensive Examination of the STO+ Framework and its Regulatory Implications 		Custody, Public Offerings, Regulatory Sandbox, RFI Responses, Safe Harbor, Security Status, Tokenization, Trading
  • The STO+ token model aims to ensure compliance with existing legal frameworks while fostering innovation that benefits both investors and users.
  • The conversion mechanism between ST and ST+ tokens is designed to be lawful and beneficial to investors, aligning with existing securities law requirements.
  • The application of SEC Rule 144 one-year lock-up period to ST+ tokens is deemed inappropriate and counterproductive for the STO+ framework.
Kiln

Re: There Must Be Some Way Out of Here 		Crypto ETPs, Crypto Lending, RFI Responses, Security Status, Tokenization, Trading
  • Kiln argues that Proof-of-Stake (PoS) blockchain activities, such as staking, do not involve the offer and sale of securities under the Securities Act and Exchange Act.
  • Kiln emphasizes that staking rewards are protocol-defined and not derived from the managerial efforts of others, thus falling outside the scope of the Howey test for investment contracts.
  •  Kiln supports regulatory clarity that distinguishes between core blockchain infrastructure activities and traditional securities transactions.
John Schoenecker, Taxbit

RE: Written Input to the Crypto Task Force 		Custody, RFI Responses, Safe Harbor, Security Status, Trading
  • The PROOF Act introduced by Senators Tillis and Hickenlooper requires digital asset exchanges and custodians to submit periodic proof of reserves (PoR) inspections by a neutral third party to the Treasury.
  • Real-time on-chain PoR reporting can prevent misappropriation of assets, as demonstrated by the FTX scandal.
  • Auditors of digital assets should verify them by tracking and confirming their existence on entity-owned and controlled blockchain wallet addresses.
Global Legal Entity Identifier Foundation (GLEIF)

A Response by the Global Legal Identifier Foundation (GLEIF) to the Securities and Exchange Commission’s Crypto Task Force 		Custody, RFI Responses, Security Status, Tokenization, Trading
  • The LEI (Legal Entity Identifier) is a 20-character, alpha-numeric code based on the ISO 17442 standard, which uniquely identifies a legal entity and is nonproprietary.
  • The vLEI (Verifiable Legal Entity Identifier) is a cryptographically verifiable version of the LEI, providing automated and nonrepudiable verification of an organization’s identity and the persons acting on its behalf.
  • The costs of obtaining and renewing an LEI are governed by a cost-recovery model, requiring review and approval by GLEIF.
Andreessen Horowitz, a16z

Re: Recommendations Regarding a Safe Harbor and Crowdfunding Regime for Collectible Tokens (NFTs) 		RFI Responses, Safe Harbor, Security Status
  • The document recommends the creation of a safe harbor to exclude ordinary transactions of collectible tokens from federal securities laws.
  • It proposes new crowdfunding regulations for transactions of collectible tokens that may engender risks addressed by federal securities laws.
  • The document emphasizes that collectible tokens generally do not have the inherent characteristics of securities and should not be subject to federal securities laws.
Figure Markets

Submission to SEC Crypto Task Force 		Crypto Lending, Custody, Public Offerings, Regulatory Sandbox, RFI Responses, Safe Harbor, Security Status, Tokenization, Trading
  • The SEC should clarify the security status of crypto assets like stablecoins, wrapped tokens, and NFTs to foster innovation and protect investors.
  • Tailored disclosure requirements for specific non-security crypto asset categories should be established to ensure transparency and investor protection.
  • A safe harbor provision, such as Rule 195, should be considered to encourage blockchain development within regulatory parameters.
Alternative Investment Management Association (AIMA)

Re: AIMA written input to the SEC’s Crypto Task Force 		Crypto ETPs, Crypto Lending, Custody, Public Offerings, Regulatory Sandbox, RFI Responses, Safe Harbor, Security Status, Tokenization, Trading
  • AIMA recommends the SEC adopt a clear, principles-based regulatory approach toward crypto assets, recognizing their diverse nature and use cases.
  • AIMA urges the SEC to provide clear custody guidelines for RIAs and other institutional investors, emphasizing the need to withdraw the proposed Safeguarding Rule.
  • AIMA suggests that the SEC consider adopting a version of Rule 195 to provide clarity on when a token sale ceases to be an investment contract and when a network achieves sufficient decentralization.