Crypto advocacy initiative the DeFi Education Fund and Andreessen Horowitz (a16z) are encouraging the United States Securities and Exchange Commission (SEC) to develop a “safe harbor” for apps pertaining to the blockchain sector, according to an August 13 blog post published on the a16z website.
SEC Asked to Create Blockchain Safe Harbor
Both the DeFi Education Fund and a16z submitted proposals to the SEC on August 12 in a bid to persuade the federal regulator to create a “safe harbor” for blockchain-powered apps.
“The SEC has previously taken the position—through enforcement actions and Wells notices—that developers of apps could be deemed brokers if they enabled users to transact in securities,” the blog post reads.
As a solution, the two entities posit that the SEC provides a “rebuttable presumption” that software interfaces used for peer-to-peer transactions would not be engaged in “broker-dealer activity.”
“Concerns about the SEC’s prior approach aren’t just about inconvenient regulatory burdens,” the blog post states.
“Requiring broker registration for neutral apps would force software developers to take on roles and responsibilities they never assumed—acting as gatekeepers, taking custody, and intermediating activity—all of which undermine the benefits of blockchain systems and create new risks for users,” the blog post continues.
Will the SEC Go Through With the Crypto-Focused Proposal?
News of a16z and the DeFi Education Fund’s submitted proposals comes just months after a16z urged SEC Commissioner Hester Peirce to construct a “digital collectible” safe harbor at the federal regulator.
“The Commission should create a safe harbor (either through a Commission-level policy statement, by providing Commission-level guidance, or by adopting formal rules) that provides objective conditions under which ordinary transactions of collectible tokens are excluded from securities laws,” a16z’s March letter to Peirce states.
Taken together, the proposals reflect a continuing push by industry advocates to persuade the SEC to carve out regulatory space that shields blockchain developers from unintended legal obligations while preserving the technology’s core benefits.
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