Andreessen Horowitz (a16z) and the DeFi Education Fund have submitted a proposal to the U.S. Securities and Exchange Commission (SEC) requesting the creation of a regulatory safe harbor for non-custodial and non-discretionary decentralized finance (DeFi) and non-fungible token (NFT) applications [1]. The initiative aims to address the regulatory uncertainty that has hindered DeFi innovation in the United States by clarifying the status of these applications under the Exchange Act [2]. The letter, addressed to SEC Commissioner Hester Peirce and the Crypto Task Force, emphasizes that such applications should not be misclassified as brokers, thereby avoiding the need for burdensome broker-dealer registration [3].
The proposed safe harbor would exempt eligible blockchain-based applications from the SEC’s broker-dealer registration requirements. This move is intended to reduce the enforcement risks currently faced by developers and foster a more predictable environment for innovation [4]. The proposal is particularly timely, following a directive from SEC Chair Paul Atkins in July 2025 to modernize outdated crypto rules [5]. It builds on a prior a16z initiative in March 2025 that proposed a safe harbor for airdrops and network tokens [6].
The regulatory landscape for digital assets has become increasingly complex, especially after the SEC expanded its broker-dealer framework in 2024 to include a broader range of crypto activities [7]. At that time, the agency reported 3,340 registered broker-dealers managing $6.4 trillion in assets. The introduction of the Special Purpose Broker-Dealer (SPBD) category in 2020 was later clarified to be non-mandatory for all crypto-related broker-dealers [8]. This context underscores the need for a tailored regulatory approach that supports innovation while maintaining investor protection.
The DeFi and NFT sectors, which operate largely through decentralized infrastructure and user-controlled systems, stand to benefit significantly from the proposed safe harbor [9]. By reducing regulatory barriers, the initiative could enhance developer confidence, spur new project development, and attract increased investment in blockchain innovation. The proposal aligns with broader legislative efforts, such as the CLARITY Act, aimed at establishing a clearer legal framework for crypto markets [10].
Amanda Tuminelli, Executive Director of the DeFi Education Fund, emphasized the importance of enabling developers to build without encountering “unreasonable regulatory barriers” that do not align with the nature of the technology [2]. The outcome of the SEC’s review could shape the future of DeFi regulation in the U.S. and influence the direction of blockchain development and investment strategies in the coming years.
Source: https://www.ainvest.com/
