Andreessen Horowitz (a16z) and the advocacy organization DeFi Education Fund have asked the US Securities and Exchange Commission (SEC) to set up a safe harbor program for non-fungible token (NFT) and decentralized finance (DeFi) applications from the agency’s broker-dealer registration requirements.
In a Wednesday letter to SEC Commissioner and Crypto Task Force head Hester Peirce, a16z and the DeFi group said they were following up on US President Donald Trump’s Working Group on Digital Assets call to “provide relief for certain DeFi service providers from the broker-dealer […], exchange […], and clearing agency […] registration provisions of the Exchange Act.”
In July, SEC Chair Paul Atkins also said he had directed the agency’s staff to “update antiquated agency rules and regulations” concerning certain crypto and blockchain applications.
A safe harbor, in terms of SEC regulations, would allow many companies offering crypto-related products and services to avoid enforcement actions. The commission and individual investors have previously filed civil lawsuits against cryptocurrency companies for operating as unregistered dealers, including Cumberland DRW, Coinbase and Kraken.
Letter to Hester Peirce from a16z and DeFi Education Fund. Source: a16z
Related: SEC Commissioner says ‘safe harbor’ laws would’ve made ICO problems worse
“The guiding principle of the safe harbor is that only those Apps which do not engender the risks that the Exchange Act’s broker-dealer regulatory regime was designed to address should be eligible; in such cases, registration as a broker under the Exchange Act is unwarranted and inappropriate,” said the letter to the SEC, adding:
“A safe harbor would provide much-needed regulatory clarity, preserve the Commission’s authority to oversee high-risk activities, and ensure that developers can build in the United States without fear of the misapplication of legal categories inappropriate for modern software infrastructure.”
The proposed change in SEC policy…
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