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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.
AMM‑based trading of tokenized securities must be regulated based on function, not technology, ensuring that entities performing exchange, ATS, broker, or dealer roles—such as protocol deployers, governance bodies, significant liquidity providers, and front‑ends—are subject to corresponding federal securities law obligations.
AMMs introduce structural investor‑protection and market‑integrity risks (MEV/front‑running, slippage, oracle failures, pseudonymous trading, lack of surveillance, limited dispute resolution, liquidity fragmentation) that must be mitigated through mandatory controls, disclosures, AML/KYC application, and integration with existing market‑structure requirements.
To support compliant securities trading, AMM venues must incorporate price discovery, reporting, systems integrity, and operational resilience comparable to Regulation NMS and Regulation SCI, including reliable market data, transparent execution, and accountable entities capable of maintaining and upgrading smart‑contract trading systems
Digital‑asset documentation is often fragmented across exchanges, wallets, tax reports, platform statements, and user‑generated materials, creating evidentiary uncertainty in legal, fiduciary, and insurance contexts.
Because regulatory treatment may hinge on issuer representations, managerial efforts, and disclosures—not merely asset characteristics—the reliability and completeness of record sets materially affect legal determinations.
The absence of a neutral infrastructure for assessing completeness, consistency, and evidentiary sufficiency of digital‑asset records creates a procedural gap that impairs courts, fiduciaries, and counterparties in evaluating claims.
The submission urges the SEC to distinguish legally between tokenization and canonicalization, arguing that only canonicalized, ledger-native asset objects allow the Commission to examine, audit, and enforce regulatory obligations at the protocol level.
It recommends that Regulation Crypto include architectural requirements for digital-asset securities, potentially through a class definition certification regime that embeds compliance logic in canonical class definitions rather than relying on issuer-by-issuer contract code.
It advises that safe harbors, custody rules, and settlement frameworks must account for ledger architecture, warning that permitting trading on smart contract systems lacking canonical asset identity leaves the SEC unable to enforce against assets the ledger cannot natively identify.
Custody, Public Offerings, RFI Responses, Security Status, Tokenization, Trading
The SEC should continue developing a clear regulatory framework enabling broker‑dealers to custody, trade, and support crypto asset securities, including on ATSs, to reduce legal uncertainty and enable compliant market participation.
The SEC should issue bright‑line standards for tokenized securities, ensuring ATSs can rely on the regulatory status ascribed to a tokenized instrument—critical for avoiding unintended securities‑based swap or unregistered offering violations.
The SEC should provide regulatory clarity permitting on‑chain recordkeeping and settlement by broker‑dealers without triggering clearing‑agency status, enabling lawful integration of distributed‑ledger processes into securities market infrastructure.
SIFMA (Securities Industry and Financial Markets Association)
SIFMA urges that Regulations ATS and NMS must continue to apply fully to tokenized securities and on chain trading platforms, cautioning against lowering standards for crypto ATSs or exempting new entrants from established investor protection obligations.
Consistent registration requirements (exchange, ATS, broker dealer) are deemed essential for any on chain trading venue, as integration into SIPs/TRFs and market wide surveillance is impossible without formal regulatory status.
Price discovery, transparency, and post trade reporting must remain intact, including harmonized volatility controls and prevention of market fragmentation across tokenized, wrapped, and traditional securities trading environments.
Daniel Bruno Corvelo Costa
Custody, Security Status, Tokenization, Trading
The framework establishes a standardized, cross-domain operational model for digital provenance, chain-of-custody, and bounded verification, ensuring that any digital artifact (including AI-generated content) relied upon for financial, regulatory, or contractual decisions is attributable, reproducible, and subject to replayable review. This model is designed to meet the evidentiary standards required for regulatory examination, legal discovery, and institutional audit, without itself making legal conclusions or imposing new legal obligations.
The framework introduces a tiered access model (Tier 0/1/2) for reviewers and examiners, enabling claim-level, purpose-limited evidence review without requiring pervasive disclosure of sensitive or proprietary data. This supports regulatory and legal oversight by providing examiner-ready Evidence Packs and query packs, while preserving confidentiality and minimizing unnecessary data exposure.
Passage of a claim through the framework’s evidence workflows does not constitute legal authentication, judicial admissibility, or editorial verification. The framework explicitly states that it does not create legal obligations, interpret specific laws, or substitute for legal, compliance, or regulatory review. Evidentiary states produced are inputs to institutional judgment, not substitutes for it.
The submission proposes a Structural Enforcement Standard that embeds legally binding transfer conditions, remedies, revocability, and dispute resolution terms directly into a token’s architecture, ensuring obligations survive every transfer and eliminating reliance on platform-level enforcement.
The model applies traditional trust law architecture—separating authority (trustee) from beneficial rights (beneficiary)—to digital assets through a dual layer token structure that enables automatic, on chain enforcement consistent with established legal doctrine.
The author urges the SEC to grant regulatory clarity and potential safe harbor for tokens adopting this structure, arguing it provides superior investor protection, clearer legal classification, and a scalable foundation for institutional tokenization.
Public Offerings, Security Status, Tokenization, Trading
The letter underscores that applying existing securities-law pathways (Reg A, Reg D, Reg CF, broker dealer requirements, transfer agent rules, and blue sky compliance) to millions of small value real estate tokenizations is economically prohibitive, creating a structural mismatch between current securities regulation and the scale of RWA tokenization.
It raises the question of whether the SEC will consider new, scalable regulatory frameworks tailored to real property tokenization, distinct from those used for institutional grade tokenized assets, to avoid overwhelming regulatory capacity.
It proposes AI assisted disclosure and verification systems as a potential lawful infrastructure for scalable compliance, while acknowledging legal concerns around delegation, data reliability, and alignment with state property law.
Daniel Bruno Corvelo Costa
Custody, Security Status, Tokenization, Trading
The framework establishes a non-normative, examiner-ready operational evidence layer that enables cryptographically verifiable, independently replayable records for sports performance, official results, and revenue-linked claims. This layer is designed to support, not replace, existing league, federation, and contractual governance, making rights and obligations easier to assert, verify, and defend in regulatory and adjudicative contexts.
It mandates multi-source verification, immutable logs, and content-addressed manifests for all material sports and revenue states. This structure is intended to eliminate information asymmetry, reduce the cost and frequency of disputes, and ensure that evidence for contractual triggers, royalty calculations, and anti-doping determinations is independently reconstructable and auditable.
The framework provides institution-safe, implementation-agnostic standards for packaging sports and revenue evidence, including examiner-ready query packs, preservation bundles, and bounded supervisory access. These controls are designed to facilitate institutional investment, regulatory oversight, and auditability, while maintaining strict chain-of-custody and data minimization for sensitive or confidential information.
Standardized compliance interfaces such as ERC‑7943 can reduce operational risk and fragmentation by enabling consistent eligibility checks, transfer controls, freezing, and enforcement mechanisms across tokenized instruments.
The existence or absence of onchain compliance controls should not be treated as a legal classification test; tokenization does not alter whether the underlying asset is a security under U.S. law.
Tokenized instruments incorporating administrative powers like freezing or forced transfers require transparent disclosure of authority, governance processes, emitted events, and remediation pathways to safeguard investor protection.
