Fairmint, a leading onchain securities platform and SEC-registered transfer agent, has proposed a comprehensive blockchain framework to the SEC's Crypto Task Force, aiming to modernize the $6 trillion private securities market. The proposal outlines practical steps to revolutionize the American private securities market through blockchain technology.

The private securities ecosystem, which stands at $6 trillion, heavily relies on unregulated cap table vendors that offer expensive spreadsheet software without settlement capabilities and limited regulatory oversight. Fairmint's submission addresses the operational challenges encountered daily in private securities administration and offers a seven-point policy framework to modernize the infrastructure.

Fairmint's framework emphasizes solutions that benefit the entire equity securities ecosystem, reflecting its vision of blurring the lines between traditional and onchain finance. Having managed over $1 billion in onchain securities issuances and transactions, Fairmint aims to demonstrate how blockchain technology can enhance investor protections.

The seven interconnected solutions within Fairmint's framework are:

1. Infrastructure Standardization: Establishing protocol-level interoperability to enable seamless integration across transfer agents. This standardization aims to improve operational efficiencies and create a more unified system.
2. Real-Time Regulatory Observability: Implementing observer nodes that provide continuous SEC oversight without compromising privacy. This allows for better monitoring and compliance.
3. Investor Self-Custody Rights: Ensuring direct ownership with embedded compliance protections. This empowers investors by giving them more control over their assets while maintaining regulatory safeguards through smart contract restrictions.
4. Knowledge-Based Accreditation: Replacing outdated wealth thresholds with knowledge-based investor qualification. This modernizes access to private markets by focusing on investor understanding rather than solely on wealth.
5. Non-Custodial Broker-Dealer Framework: Providing regulatory clarity for smart contract-based intermediation. This fosters innovation by enabling new forms of financial services within a clear legal framework.
6. Regulated DeFi Sandbox: Creating a controlled innovation environment for compliant experimentation. This allows for the exploration of decentralized finance (DeFi) applications under regulatory supervision.
7. Direct Settlement Architecture: Evolving towards direct onchain infrastructure, replacing legacy intermediaries. This streamlines the settlement process, reducing friction and increasing efficiency.

Fairmint's initiative seeks to address the disparity between private and public market infrastructure, where private companies often manage complex cap tables using outdated tools like Excel. This situation introduces unnecessary complications, compliance risks, and stifles capital formation and growth. By advocating for standardized solutions, Fairmint aims to provide the necessary transparency and oversight while maintaining privacy.

Joris Delanoue, CEO of Fairmint, noted the current reliance on Excel spreadsheets for managing billion-dollar cap tables in private companies, contrasting it with the regulated infrastructure available to public companies. He emphasized that Fairmint has spent years building a solution to bridge this gap by going onchain and is now sharing the regulatory roadmap to scale it industry-wide.

The framework has been submitted to SEC Chairman Paul Atkins and Commissioner Hester Peirce.