NEW YORK, NY, October 19th, 2026, FinanceWire
SEC comment letter recommends technology-neutral rules connecting investor identity, disclosures, ownership records, payments, and settlement throughout the investment lifecycle
KoreInside, a provider of technology infrastructure for private capital markets, today announced it has submitted a comment letter to the U.S. Securities and Exchange Commission on proposed Regulation Crypto Assets, recommending a framework that expands capital formation while preserving clear legal rights, accountable transaction processing, and dependable investor protections.
KoreInside supports the Commission’s objective of creating workable capital formation pathways for covered investment contracts. Its letter recommends targeted changes to make the proposed framework practical for issuers and intermediaries and reliable for investors as assets move between systems or projects change regulatory status.
The company’s central recommendation is to recognize an infrastructure model combining durable, verifiable records; reusable evidence of identity, capacity, and eligibility; and coordinated transaction processing with current authorization checks.
“Capital formation depends on more than issuing a token. Investors need to understand what they own, which disclosures informed their decision, who has authority to act, and whether the payment and asset transfer have actually settled,” said Dr. Kiran Garimella, Co-Founder, CTO and CSO of KoreInside. “A practical regulatory framework should connect those elements throughout the investment lifecycle. Technology can make that evidence easier to verify and reuse, while keeping responsibility with the parties performing each function.”
Preserving Legal Rights Across Technologies
KoreInside urges the Commission to maintain a clear distinction between a crypto asset and the legal rights associated with an investment contract. Tokenization, wrapping, or migration to another network should not, by itself, change an instrument’s substantive legal character.
An equity interest, note, or other security should retain the protections applicable to it regardless of how it is represented or recorded. Similarly, a change in regulatory classification should not be presented as canceling contractual obligations, property interests, or claims arising from earlier conduct.
Making Investor Protections Work in Practice
KoreInside’s comment letter addresses six operational priorities:
- Durable disclosures: Preserve complete, dated disclosure versions and amendments, with accessible archives and prompt notices of material events.
- Reusable identity evidence: Recognize optional credentials for identity, eligibility, and representative authority, while protecting personal information and preserving each responsible firm’s obligations.
- Clear ownership and settlement responsibilities: Explain which records establish investor entitlements, who controls funds or assets, and how failed or incomplete transactions are resolved.
- Technology-neutral implementation: Accommodate public, permissioned, and hybrid ledgers, including systems combining on-chain execution with protected off-chain records.
- Supported regulatory transitions: Require evidence supporting an issuer’s transition determination, distinguish successful completion from abandonment, and preserve existing obligations and claims.
- Compatible standards: Encourage common data definitions and export formats so participants can change providers or networks without losing essential records.
The company also recommends avoiding a reporting and resale cliff for existing holders when the proposed Startup Exemption’s four-year period ends while the underlying investment relationship continues. Its letter proposes a proportionate continuation route for outstanding interests, without extending the period for new fundraising under that exemption.
Supporting Access Through Accountable Infrastructure
KoreInside supports participation by non-accredited investors alongside proportionate safeguards that small issuers can administer. The company advocates compliance requirements calibrated to funds raised, discretionary control, custody exposure, and operational complexity.
Its recommendations encourage guidance that allows compatible services to work together while assigning responsibility according to the activities each participant performs. No particular vendor, ledger, identity system, or independent certification service should be mandatory merely because an issuer chooses the exemption.
Through its submission, KoreInside encourages a framework that makes capital formation more accessible while maintaining dependable records, clear responsibilities, and meaningful protections throughout the investment lifecycle.
Read the full comment letter: KoreInside’s SEC Comment Letter on Proposed Regulation Crypto Assets.
About KoreInside
KoreInside is a global capital markets infrastructure company providing blockchain technology, digital securities solutions, identity management, compliance automation, transfer agency services, and regulatory technology for private capital markets. Through its ecosystem, including KoreChain, KoreOracle, KoreID, Compliance Desk, and KoreTransfer, KoreInside enables the compliant digitization, issuance, management, and transfer of securities across global markets.
For more information, visit www.koreinside.com or www.koreid.app.