Six Blockchain Groups Seek SEC Presumption for Digital Commodity Resales

Six blockchain groups asked the SEC to presume that some secondary-market sales of digital commodities do not involve investment contracts when no issuer representations or promises about essential managerial efforts remain outstanding. Their proposal would set a condition for when resale activity by people other than issuers receives that treatment.

The comment arrived Tuesday, Oct. 20, the closing date for responses to Regulation Crypto Assets. The participating organizations are Stellar Development Foundation, Hedera, Aptos Labs, Ava Labs, Cardano Foundation and Chainlink Labs. The request follows the groups’ earlier effort to put a digital commodity definition in the rule.

In addition to seeking the resale presumption, the coalition wants the regulation itself to define a digital commodity and say the asset is not a security. It also wants the text to make clear that an asset’s involvement in an investment contract does not, by itself, make that asset a security. That distinction leaves room for securities laws to cover an offer or sale made as part of an investment contract, even when the underlying asset is not a security.

The SEC’s March interpretation named Aptos (APT), Avalanche (AVAX), Cardano (ADA), Chainlink (LINK), Hedera (HBAR) and Stellar (XLM) as examples of digital commodities. The groups want the commission to preserve those classifications and provide class-wide exemptive relief for the commodities named in the interpretation without requiring a Form TR filing.

The coalition also wants Rule 400’s safe harbor to remain optional. Using it would not count as conceding that an investment contract exists or existed, while declining to use it would not create a presumption that one does. The groups also seek to leave the SEC’s and Commodity Futures Trading Commission’s respective authorities unchanged.

Regulation Crypto Assets remains a proposal. It would create exemptions from registration for certain investment contracts involving crypto assets, including one covering up to $5 million over four years and another covering up to $75 million in each 12-month period. The comment requests changes to the framework; it does not revise the proposal or determine the treatment of any asset.