Wintermute pushes for clear crypto guidelines
Crypto market maker Wintermute has asked the U.S. Securities and Exchange Commission to confirm that "network tokens" like Bitcoin and Ethereum are not securities. The company also wants the SEC to explain how broker-dealers can trade, settle and custody tokenized securities.
The company submitted its recommendations to the SEC's Crypto Task Force, which is gathering public input on digital-asset market structure. Wintermute said clarity is needed to avoid misapplying securities laws to digital commodities that power decentralized networks.
Moreover, the firm is requesting guidance stating that network tokens that power decentralized protocols do not meet the Howey test. In Wintermute’s view, this should hold even if such tokens were initially sold to raise funds or later traded for profit.
The written input page lists Wintermute's filing and highlights its three main points: allowing dealers to run tokenized-securities operations, clarifying that DeFi liquidity provision does not automatically require dealer registration, and confirming that network tokens are not securities under Howey.
Moreover, the firm is requesting guidance stating that network tokens that power decentralized protocols do not meet the Howey test. In Wintermute’s view, this should hold even if such tokens were initially sold to raise funds or later traded for profit.
The SEC's Crypto Task Force is collecting written input and meeting with market participants as it evaluates policy around digital assets, tokenization and trading venues. Wintermute's submission references recent SEC staff statements that addressed the status of certain meme coins, stablecoins, protocol staking activities and liquid-staking tokens.
The written input page lists Wintermute's filing and highlights its three main points: allowing dealers to run tokenized-securities operations, clarifying that DeFi liquidity provision does not automatically require dealer registration, and confirming that network tokens are not securities under Howey.
The filing also asked the SEC to explicitly permit dealers to trade tokenized securities for their own accounts. It wants dealers to be able to clear and settle directly those trades using wallets and stablecoins.
Wintermute believes that compliance obligations for tokenized securities can be enforced through smart-contract controls, including whitelists and programmed transfer restrictions. The firm urges the SEC to update "ready market" interpretations and no-action letters.
Separately, the company calls for guidance on decentralized finance. According to the market maker’s analysis, proprietary trading on a DeFi protocol or providing liquidity should not, by itself, require broker-dealer registration.
This applies whether trading is done directly or through pools. It also argues that non-U.S. entities transacting from abroad should not fall under U.S. jurisdiction unless they specifically target U.S. persons.
Wintermute believes that compliance obligations for tokenized securities can be enforced through smart-contract controls, including whitelists and programmed transfer restrictions. The firm urges the SEC to update "ready market" interpretations and no-action letters.
Separately, the company calls for guidance on decentralized finance. According to the market maker’s analysis, proprietary trading on a DeFi protocol or providing liquidity should not, by itself, require broker-dealer registration.
This applies whether trading is done directly or through pools. It also argues that non-U.S. entities transacting from abroad should not fall under U.S. jurisdiction unless they specifically target U.S. persons.
