Andreessen Horowitz (a16z) and the advocacy group DeFi Schooling Fund have requested the US Securities and Alternate Fee (SEC) to arrange a secure harbor program for non-fungible token (NFT) and decentralized finance (DeFi) purposes from the company’s broker-dealer registration necessities.
In a Wednesday letter to SEC Commissioner and Crypto Job Power head Hester Peirce, a16z and the DeFi group mentioned they have been following up on US President Donald Trump’s Working Group on Digital Belongings name to “present reduction for sure DeFi service suppliers from the broker-dealer […], change […], and clearing company […] registration provisions of the Alternate Act.”
In July, SEC Chair Paul Atkins additionally mentioned he had directed the company’s employees to “replace antiquated company guidelines and rules” regarding sure crypto and blockchain purposes.
A secure harbor, by way of SEC rules, would permit many firms providing crypto-related services and products to keep away from enforcement actions. The fee and particular person traders have beforehand filed civil lawsuits in opposition to cryptocurrency firms for working as unregistered sellers, together with Cumberland DRW, Coinbase and Kraken.
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“The guideline of the secure harbor is that solely these Apps which don’t engender the dangers that the Alternate Act’s broker-dealer regulatory regime was designed to deal with needs to be eligible; in such circumstances, registration as a dealer underneath the Alternate Act is unwarranted and inappropriate,” mentioned the letter to the SEC, including:
“A secure harbor would supply much-needed regulatory readability, protect the Fee’s authority to supervise high-risk actions, and make sure that builders can construct in the US with out concern of the misapplication of authorized classes inappropriate for contemporary software program infrastructure.”
The proposed change in SEC coverage adopted a16z sending a letter in March to Peirce, detailing suggestions for an NFT secure harbor on the company. The corporate additionally mentioned in a separate letter that the fee “may take the next steps” of organising secure harbors for airdrops and community tokens.
Which firms could possibly be impacted by the “secure harbor” proposal?
In June, the SEC reported that about 3,340 broker-dealers with $6.4 trillion in belongings had registered with the company as of 2024. The company famous on the time that there had been a development of “business consolidation, with a declining fraction of market contributors accountable for a bigger asset pool.”
The fee established the class of Particular Function Dealer-Sellers (SPBD) in December 2020 for custodying digital asset securities. Nonetheless, the SEC clarified in Could that the SPBD designation was not obligatory for “broker-dealers looking for to custody buyer crypto belongings which might be securities,” including that commonplace necessities would apply for each participating in digital asset and conventional securities.
How the SEC and Commodity Futures Buying and selling Fee (CFTC) deal with digital belongings may change as soon as lawmakers within the US Congress deal with proposed laws to determine a crypto market construction. The main invoice for market construction, known as the CLARITY Act, was handed by the Home of Representatives in July and awaits consideration within the Senate.
Journal: SEC’s U-turn on crypto leaves key questions unanswered
