DeFi Education Fund and a16z urge SEC to create regulatory safe harbor for blockchain apps
Quick Take The venture capital firm and DeFi advocacy group called for a safe harbor that could clarify broker rules for blockchain apps, such as Uniswap, Coinbase Wallet, OpenSea, among others. For apps to qualify for the proposed safe harbor and be excluded from the agency’s broker-dealer regulatory regime, they need to be non-custodial, not make recommendations or exercise discretion, and they say underlying protocols need to be decentralized.
The DeFi Education Fund and Andreessen Horowitz proposed a safe harbor for certain applications as the U.S. Securities and Exchange Commission pivots toward a new approach to regulating digital assets.
In a letter sent on Wednesday to SEC Commissioner Hester Peirce, the venture capital firm and DeFi advocacy group called for a safe harbor that could clarify broker rules for blockchain apps, such as Uniswap, Coinbase Wallet, and OpenSea, among others.
"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," they said in the letter.
The call for reform comes amid a noticeable regulatory shift under the Trump administration.
Over the past year, the agency created a new crypto task force to "set the SEC on a sensible regulatory path," dropped investigations into several crypto firms, and debuted a new initiative called "Project Crypto" to update its rules around digital assets. At the top, Trump has repeatedly vowed to make the U.S. the "crypto capital."
Under the previous administration, the SEC took specific enforcement actions, which signalled that the agency insinuated that those apps needed to be registered as brokers, the DeFi Education Fund and a16z said. The SEC had alleged that Coinbase Wallet functioned as a broker and was unregistered, but a court later dismissed that claim. The agency had also previously sent notices to both Uniswap Labs and OpenSea that they were under investigation, but those were later dropped.
For apps to qualify for the proposed safe harbor and be excluded from the agency's broker-dealer regulatory regime, they need to be non-custodial, not make recommendations or exercise discretion, and they say underlying protocols need to be decentralized.
"These conditions are grounded in the understanding that most Apps are fundamentally non-custodial, passive software tools that allow users to interact directly with public, decentralized network and protocol infrastructure," they said in the letter.
Amanda Tuminelli, executive director at the DeFi Education Fund, said the safe harbor is intended to be flexible.
"Developers deserve clarity, and our hope in submitting this proposal is to provide front end developers with guidelines enabling them to build without fear of being scoped into unreasonable requirements that are misaligned with the realities of the technology," Tuminelli said in a statement.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
US chip stocks plunge, evaporating over $1 trillion in market value! Inflation exceeds expectations, reigniting rate hike prospects; AI infrastructure financing bottlenecks trigger valuation reassessment
With the September inflation data exceeding expectations and further strengthening the Fed's rate hike outlook—coupled with rare warnings from the CEOs of Broadcom and Intel about financing bottlenecks in AI infrastructure—the global AI-themed trade, centered on semiconductors, experienced a massive sell-off in the past week.
Defying the Market Downturn! Apple Joins the $5 Trillion Club
On Wednesday, the S&P 500 fell more than 1%, but Apple defied the trend, with its market capitalization officially surpassing $5 trillion, becoming the second company worldwide to reach this milestone after Nvidia. This market value breakthrough coincides with Cook stepping down and new CEO Ternus taking over. However, challenges such as Apple's shortcomings in AI and OpenAI's ambitions in hardware are creating undercurrents at the top of this $5 trillion summit.
CoreWeave Dilemma for Nvidia: Forced to Rescue or Stand By?
As both a shareholder of CoreWeave and its sole GPU supplier, Nvidia now faces a dilemma after the sharp decline in CoreWeave's stock price. If it intervenes, each rescue strengthens expectations of a safety net, raises the threshold for future rescues, and risks getting further entangled in this high-leverage game. If it does not intervene, CoreWeave's liquidity crisis will directly cut off demand for GPU purchases, simultaneously devaluing Nvidia's equity investment and severely damaging its market reputation.
US CPI Heats Up Across the Board, Triggering "Inflation Spiral" Alert; October Rate Hike Odds Once Hit 50%. "New Fed News Agency": Watch Waller's Speech This Week
After the CPI was released, the market-implied rate hike probability first rose to 50% before falling back to 40%. Wall Street generally believes that whether action will be taken in October still depends on how the Federal Reserve assesses inflation trends. "The New Fed News Agency" noted that, unlike in August when price increases were concentrated in certain items, the stronger-than-expected performance of September's core CPI was more broad-based, further reinforcing the case for a December rate hike. The speech by Waller on Friday morning Beijing time is his last public statement before the Fed's blackout period ahead of this month's meeting. Economists are warning about an "inflation spiral," with real purchasing power and midterm election pressures interweaving.
Crypto prices
More
