In an effort to innovate within the private equity sector, Fairmint, a platform specializing in on-chain securities, has encouraged the U.S. Securities and Exchange Commission (SEC) to adopt regulatory protocols grounded in blockchain technology.

On June 16, 2025, Fairmint submitted a comprehensive seven-point proposal to the SEC’s crypto task force, advocating that blockchain technology could significantly enhance and revamp outdated administrative systems in the $6 trillion private securities market.

Fairmint operates as a registered transfer agent with the SEC, and in its briefing to SEC Chair Paul Atkins and Commissioner Hester Pierce, it pointed out the major operational challenges that exist within private markets.

The company presented practical solutions that it believes align with the existing regulatory frameworks. The proposal outlines that many aspects of the private market still rely on antiquated infrastructure, which hampers effectiveness and transparency.

“Private markets operate on incompatible spreadsheets and Web2 vendor databases, leading to inefficiencies and compliance gaps,” stated Fairmint.
— Fairmint (@FairmintCo) June 16, 2025

Fairmint expects this proposal to facilitate a unification among transfer agents and provide real-time regulatory oversight, thus increasing accessibility for investors.

Fairmint Proposes Implementing Protocol-Level Interoperability

The strategy put forth by Fairmint seeks to introduce protocol-level interoperability to streamline private market operations. This initiative, they assert, would rectify the present disjointed processes and offer crucial relief to transfer agents.

They have also suggested incorporating blockchain-based observer nodes to augment regulatory supervision, enabling the SEC to track transactions live while preserving user privacy. Furthermore, Fairmint proposed self-custody for investors to ensure direct ownership of private securities, supplemented with built-in compliance measures.

They advocate a knowledge-based accreditation framework to replace traditional investor qualification methods and have recommended a non-custodial broker-dealer model for smart contract-led mediation. Additionally, Fairmint has called for a Decentralized Finance (DeFi) sandbox for safe experimentation in a structured environment.

“Our seven-point framework directly addresses the issues caused by fragmentation in the private market infrastructure,” added Fairmint.
— Fairmint (@FairmintCo) June 16, 2025

Lastly, Fairmint has advised the SEC to implement a direct settlement framework powered by smart contracts, thereby simplifying settlements and eliminating unnecessary middlemen. They believe these measures will alleviate administrative pressures and encourage innovation.