SEC Crypto Task Force Receives Urgent Quantum Computing Security Proposal
The US Securities and Exchange Commission's Crypto Assets Task Force received a comprehensive proposal warning that quantum computing could destroy the cryptographic foundations protecting Bitcoin, Ethereum, and broader digital assets. Cointelegraph reports the 74-page submission titled "Post-Quantum Financial Infrastructure Framework" was authored by Daniel Bruno Corvelo Costa on Wednesday.
The framework warns that advances in cryptographically relevant quantum computers could break fundamental security protecting trillions of dollars in assets. This would lead to systemic risk, catastrophic investor losses, and complete erosion of market confidence according to the proposal. The submission addresses the "Harvest Now, Decrypt Later" threat where adversaries collect encrypted data today to unlock when quantum breakthroughs arrive.
Costa's proposal recommends automated vulnerability assessments of digital asset platforms and prioritizing high-risk systems like institutional wallets and exchanges. The framework calls for a phased migration using classical and post-quantum cryptography based on National Institute of Standards and Technology standards updated in 2024. Experts warn "Q-Day" when quantum machines can crack Bitcoin's encryption could arrive as early as 2028.
Why This Quantum Threat Demands Immediate Action
The timing of this proposal comes as quantum computing technology reaches critical maturity thresholds that threaten current cryptographic systems. The National Institute of Standards and Technology released three finalized post-quantum encryption standards in August 2024, designed specifically to withstand quantum computer attacks on electronic information systems.
NIST has been working for eight years to develop encryption algorithms that quantum computers cannot break. The agency rallied global cryptography experts to create algorithms resistant to quantum assault after recognizing the urgent need for quantum-resistant solutions. NIST selected a fifth algorithm called HQC in March 2025 as a backup defense in case quantum computers eventually crack the primary ML-KEM standard.
We previously analyzed how quantum computing threats to Bitcoin remain overblown for the 2024 halving period, concluding that realistic near-term concerns around quantum disruption were exaggerated. However, the current SEC submission reflects growing institutional recognition that long-term quantum preparation cannot be delayed indefinitely. The transition historically takes 10 to 20 years from algorithm standardization to full system integration across financial infrastructure.
Industry Faces Quantum Security Transformation
The cryptocurrency sector confronts a fundamental security transformation as quantum computing capabilities accelerate toward commercial viability. Crypto.news reports that China recently broke through 22-bit RSA encryption using quantum computers, surpassing the previous 19-bit record and demonstrating tangible progress toward cryptographically relevant quantum machines.
Major financial institutions acknowledge the quantum threat's severity. BlackRock issued warnings to investors about potential security risks to Bitcoin's encryption in May 2025, while financial institutions worldwide begin implementing quantum-resistant technologies. HSBC uses quantum-secure technology like post-quantum cryptography VPN tunnels to protect tokenized gold transactions.
The quantum computing industry itself generated $650 million to $750 million in revenue during 2024 and expects to surpass $1 billion in 2025 according to McKinsey research. This revenue surge comes from continuous deployment of quantum hardware across private industry and defense sectors, with quantum computing projected to grow from $4 billion in 2024 revenue to $72 billion by 2035.
The emergence of Q-Day represents a major shift requiring companies to rethink global security strategies. Financial institutions must transition current encryption systems to quantum-resistant alternatives before cryptographically relevant quantum computers emerge. The challenge extends beyond cryptocurrencies to all current cryptographic systems protecting banking, communications, and national security infrastructure. Industry collaboration between blockchain developers, governments, and financial institutions becomes essential for addressing quantum risks effectively and ensuring digital system resilience.
