Aptos Labs and Five Blockchain Groups Seek Clearer SEC Crypto Rules

Aptos Labs and five blockchain organizations asked the Securities and Exchange Commission (SEC) on Oct. 20 to write digital commodities’ non-security status into binding rules. Their submission seeks greater certainty for token trading, custody and development.

Blockchain Groups Seek Binding Digital-Commodity Definition

Ava Labs, Cardano Foundation, Chainlink Labs, Hedera and Stellar Development Foundation joined Aptos Labs. They support the SEC’s March interpretation but want its digital-commodity classification incorporated into the binding rule text.

The groups argue that this would make the framework more durable. Currently, the proposed Regulation Crypto Assets discusses the classification in its explanatory material.

The March interpretation distinguishes a crypto asset from the investment arrangements surrounding its sale. A token that is not itself a security may nevertheless be sold through an investment contract, which can bring that transaction under securities law. It also addresses when that relationship can end.

Signatories Seek Clearer Secondary-Trading Rules

The groups want secondary sales by non-issuers presumed outside investment-contract rules unless outstanding promises of essential managerial work remain attached. They also seek relief covering transactions across previously identified digital-commodity categories.

That would avoid separate Form TR filings notifying the SEC that an investment contract has ended. The request concerns how existing classifications apply across transactions.

They also want voluntary Rule 400 filings to carry no admission that an investment contract existed. Choosing not to use the safe harbor should not imply that a project’s token sales involve securities, they said.

SEC Proposal Covers Fundraising and Investment Contracts

Regulation Crypto Assets would establish exemptions allowing certain offerings of up to $5 million over four years and up to $75 million during each 12-month period. Issuers would provide disclosures and remain subject to antifraud and antimanipulation requirements.

The proposal also includes a conditional safe harbor addressing when an investment contract ends. Its public comment deadline was Oct. 20, and the exemptions and safe harbor remain proposed.

The groups also asked the SEC to preserve the March interpretation’s classifications. They said the framework should leave the respective authorities of the SEC and Commodity Futures Trading Commission (CFTC) unchanged.