Key Takeaways
- • Bitwise filed a supplemental letter dated October 21 asking the SEC for clearer protection for firms that rely on token-status filings made by others under the proposed Regulation Crypto Assets framework.
- • The request centers on distinguishing an issuer's filing of Form TR from the point at which a separate market participant can rely on an unchallenged filing.
- • Bitwise seeks protection for reasonable, good-faith determinations if a later challenge arises, with that treatment carried through investment-company and investment-adviser definitions.
- • The letter is an industry proposal hosted in the SEC comment file, not an adopted rule and not an SEC endorsement.
Summary
Bitwise is asking the Securities and Exchange Commission to clarify when a fund manager can rely on another party's determination that a crypto asset has separated from an investment contract. The asset manager's October 21 supplemental comment letter addresses this reliance question within the SEC's proposed Regulation Crypto Assets framework, according to the primary report.
The letter asks the commission to distinguish between an issuer's filing of Form TR and the point at which a separate market participant may rely on an unchallenged filing. It also seeks protection for reasonable, good-faith determinations should a later challenge arise, and asks that this treatment extend through relevant investment-company and investment-adviser definitions. Bitwise's original October 19 response framed the issue from the perspective of a firm that builds investment products using crypto assets rather than issuing them, since whether an asset could be treated as a security affects which products can hold it.
The central concern is that managers must make such decisions using public information, without access to all records held by an issuer or development team. A reliance framework would define when public filings can support those decisions and what knowledge would prevent a firm from relying on them. The supplement further argues that filing Form TR should not itself be treated as an admission about an asset's prior legal status, focusing on the consequences of using the proposed process rather than the form's availability.
The filing does not resolve the rulemaking. The arguments belong to Bitwise, and publication in the SEC's comment file does not signal commission endorsement. For fund managers, the key question in any final rules is how responsibility is divided between the party making a token-status filing and the firms that use it to construct financial products, a division Bitwise's submission places at the center of its case.
The letter asks the commission to distinguish between an issuer's filing of Form TR and the point at which a separate market participant may rely on an unchallenged filing. It also seeks protection for reasonable, good-faith determinations should a later challenge arise, and asks that this treatment extend through relevant investment-company and investment-adviser definitions. Bitwise's original October 19 response framed the issue from the perspective of a firm that builds investment products using crypto assets rather than issuing them, since whether an asset could be treated as a security affects which products can hold it.
The central concern is that managers must make such decisions using public information, without access to all records held by an issuer or development team. A reliance framework would define when public filings can support those decisions and what knowledge would prevent a firm from relying on them. The supplement further argues that filing Form TR should not itself be treated as an admission about an asset's prior legal status, focusing on the consequences of using the proposed process rather than the form's availability.
The filing does not resolve the rulemaking. The arguments belong to Bitwise, and publication in the SEC's comment file does not signal commission endorsement. For fund managers, the key question in any final rules is how responsibility is divided between the party making a token-status filing and the firms that use it to construct financial products, a division Bitwise's submission places at the center of its case.
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