Enterprise capital agency Andreessen Horowitz (a16z) and the advocacy group DeFi Training 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) functions from the company’s broker-dealer registration necessities.
In a Wednesday letter to SEC Commissioner and Crypto Activity Power head Hester Peirce, a16z and the DeFi group said they had 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 […], trade […], and clearing company […] registration provisions of the Alternate Act.”
In July, SEC Chair Paul Atkins additionally stated he had directed the company’s workers to “replace antiquated company guidelines and laws” regarding sure crypto and blockchain functions.
A secure harbor, when it comes to SEC laws, would enable many firms providing crypto-related services and products to keep away from enforcement actions. The fee and particular person buyers have beforehand filed civil lawsuits towards 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 handle needs to be eligible; in such circumstances, registration as a dealer below the Alternate Act is unwarranted and inappropriate,” stated the letter to the SEC, including:
“A secure harbor would offer much-needed regulatory readability, protect the Fee’s authority to supervise high-risk actions, and be sure that builders can construct in the US with out worry of the misapplication of authorized classes inappropriate for contemporary software program infrastructure.”
The proposed change in SEC coverage followed a16z sending a letter in March to Peirce, detailing suggestions for an NFT secure harbor on the company. The corporate additionally said in a separate letter that the fee “might take the next steps” of establishing secure harbors for airdrops and community tokens.
Which firms may very well 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 members accountable for a bigger asset pool.”
The fee established the class of Particular Objective Dealer-Sellers (SPBD) in December 2020 for custodying digital asset securities. Nonetheless, the SEC clarified in Could that the SPBD designation was not necessary for “broker-dealers in search of to custody buyer crypto belongings which are securities,” including that normal 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 might change as soon as lawmakers within the US Congress handle proposed laws to determine a crypto market construction. The main invoice for market construction, known as the CLARITY Act, was passed by the House of Representatives in July and awaits consideration within the Senate.
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