AIMA represents a rapidly growing number of traditional hedge fund managers and crypto-native hedge funds that engage with digital assets through its industry-leading Digital Assets Working Group (AIMA DAWG). AIMA DAWG provides members with the necessary resources, insights, and regulatory support to navigate this evolving landscape. 

As part of its ongoing advocacy on behalf of its traditional hedge fund and digital asset members, AIMA has responded to the SEC’s new Crypto Task Force's call for written input, suggesting that the agency should adopt a clear, principles-based regulatory approach toward crypto assets. This will ensure that the SEC: 

• Establishes regulatory clarity and legal certainty: Recognising that crypto assets encompass various asset types (e.g., fungible tokens like stablecoins, non-fungible tokens, ownership or governance rights of blockchain protocols) with distinct regulatory considerations;
• Avoids a one-size-fits-all approach: Tailoring regulations to accommodate emerging blockchain technologies and crypto assets while ensuring investor protections; and
• Encourages competitive market growth: Supporting US businesses, developers, and other market participants in the US by fostering a pro-innovation, principles-based regulatory framework.

Specifically, we recommend:

1. Withdrawal of the 2023 Safeguarding Rule Proposal: Withdraw the proposed Safeguarding Rule, as its requirements for crypto assets are unworkable.
2. Custody rule amendments: Provide guidance or modify existing Custody Rule provisions to account for the unique characteristics of crypto assets, while ensuring investor protection.
3. Regulatory coordination: Collaborate closely with the CFTC and other relevant agencies on matters related to the jurisdiction of the crypto market.
4. Crypto asset taxonomy: Establish an objective, principles-based framework for categorizing crypto assets to reduce uncertainty and regulatory overreach.
5. Staking: Clarify which staking activities do not constitute securities transactions and permit protocol staking in ETFs, with appropriate investor safeguards.

Commenting on AIMA's response, AIMA CEO Jack Inglis, said: "To foster innovation and protect investors, the SEC should establish clear and workable rules in the area of digital assets. This isn’t just a crypto issue, it matters to the alternative asset management industry, which needs regulatory clarity to participate responsibly. The US has what it takes to lead, but it needs a framework that matches the speed and scale of this technology."