{"id":42105,"date":"2025-08-14T05:46:38","date_gmt":"2025-08-14T05:46:38","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=42105"},"modified":"2025-08-14T05:46:38","modified_gmt":"2025-08-14T05:46:38","slug":"a16z-defi-education-fund-propose-sec-safe-harbor-for-dapps-developers","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=42105","title":{"rendered":"A16z, DeFi Education Fund Propose SEC \u2018Safe Harbor\u2019 For DApps Developers"},"content":{"rendered":"
\n

Venture Capital (VC) firm Andreessen Horowitz (a16z) and nonprofit research and advocacy organization DeFi Education Fund (DEF) have jointly submitted a key proposal to the Securities and Exchange Commission (SEC) to protect developers and innovation.<\/p>\n

A16z, DeFi Group Partner For Crypto Policies<\/h2>\n

On Wednesday, a16z and the DeFi Education Fund sent a letter to SEC Commissioner Hester Peirce, urging the regulatory agency<\/a> to exempt decentralized app (dApp) and developers from broker-dealer rules.<\/p>\n

The VC firm and the DeFi advocacy group proposed a safe harbor from the broker registration requirements of the Securities Exchange Act of 1934 for trading interfaces that enable users to interact with blockchains and smart contract protocols, including those related to DeFi services and non-fungible token (NFT) marketplaces.<\/p>\n

\"DeFi\"<\/p>\n

The letter aims to aid the Commission in creating clear rules for determining which Apps fall within the SEC\u2019s jurisdiction, based on specific criteria and consistent with similar safe harbors recently proposed in federal market structure legislation.<\/p>\n

DEF\u2019s Executive Directors, Amanda Tuminelli, affirmed<\/a> that \u201cDevelopers deserve clarity, and our hope in submitting this proposal is to provide front end developers with clear rules so they can build without worrying they will be subject to unreasonable requirements that are misaligned with the realities of the technology.\u201d<\/p>\n

According to the DeFi Education Fund\u2019s blog post<\/a>, the joint proposal seeks to be flexible enough to account for the \u201cever-evolving nature\u201d of early-stage tech development, while being grounded in the principle that \u201cmost web-based or app-based trading interfaces (\u2026) inherently do not engender the risks that the Exchange Act\u2019s broker-dealer regulatory regime was designed to address.\u201d<\/p>\n

\u201cOnly those Apps which do not engender the risks that the Exchange Act\u2019s 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. Conversely, Apps that do pose traditional risks that broker regulations were designed to address should not be able to avail themselves of this safe harbor,\u201d the proposal reads.<\/p>\n

Clarity For Developers<\/h2>\n

As the letter explained, apps must meet four objective criteria to qualify for the safe harbor. First, an app must be non-custodial, never taking control of users\u2019 funds, and it must not exercise discretion over the execution of user transactions. Additionally, the app must not actively solicit or provide investment recommendations and may only passively display neutral market data or functionality.<\/p>\n

Lastly, the underlying protocol must be decentralized, either interfacing with protocols that have eliminated operational control or have demonstrated \u201cgood faith intention\u201d to decentralize. The proposal also highlighted a limited exception for early-stage protocols under a certain threshold.<\/p>\n

According to the letter, this approach would offer three primary benefits, including establishing limits for the application of federal and securities laws to apps that fall within the scope of the proposed safe harbor and safeguarding DeFi developers from being subject to \u201cretroactive application of federal securities laws.\u201d<\/p>\n

Additionally, the proposal aligns with the SEC\u2019s historical practices concerning broker registration safe harbors and \u201cis consistent with the historical lack of prohibition on persons engaging in private peer-to-peer securities transactions without the participation of a registered broker, as well as Commissioner Peirce\u2019s recent dictum.\u201d<\/p>\n

As reported<\/a> by Bitcoinist, the SEC Commissioner recently called for the protection of crypto privacy rights and DeFi developments. Peirce asserted that US authorities should welcome privacy-protecting technologies and safeguard individuals\u2019 right to self-custody their digital assets.<\/p>\n

\n

We should not ask peers transacting with one another, where no intermediary exists, to collect and report information on each other. Doing so would deputize us to surveil our neighbors\u2014a practice antithetical to a free society. Nor should we require an intermediary to step in the middle of peer-to-peer transactions.<\/p>\n<\/blockquote>\n

Peirce\u2019s remarks followed the official revocation in July of a controversial crypto rule that would have mandated decentralized exchanges to comply with broker reporting obligations. Notably, the US Department of the Treasury and the Internal Revenue Service (IRS) formally scrapped<\/a> the regulation, which was set to take full effect in 2027.<\/p>\n

The rule, originally proposed in November 2021 through the Infrastructure Investment and Jobs Act, aimed to close the \u201ctax gap\u201d by broadening the definition of \u201cbrokers\u201d to include crypto exchanges and other intermediaries, while requiring DeFi platforms to report proceeds from digital asset transactions and detail user transaction information, including names and addresses.<\/p>\n

\"DeFi,<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Venture Capital (VC) firm Andreessen Horowitz (a16z) and nonprofit research and advocacy organization DeFi Education Fund (DEF) have jointly submitted a key proposal to the Securities and Exchange Commission (SEC) to protect developers and innovation. A16z, DeFi Group Partner For Crypto Policies On Wednesday, a16z and the DeFi Education Fund sent a letter to SEC […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[2],"tags":[3,4,5],"class_list":["post-42105","post","type-post","status-publish","format-standard","hentry","category-news","tag-crypto","tag-doge","tag-news"],"_links":{"self":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/42105","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=42105"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/42105\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=42105"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=42105"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=42105"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}