A16z and the DeFi Education Fund have proposed a 'safe harbor' policy to the SEC, aiming to clarify regulations for DeFi applications and exempt certain projects from broker registration requirements.

This initiative is part of a broader trend of support for DeFi, with the White House and SEC emphasizing a balanced approach that promotes innovation while managing market risks.

The push for regulatory reform comes amid a shift in the SEC’s approach under the Trump administration, including the creation of a crypto task force and the launch of 'Project Crypto' to update rules around digital assets.

Amanda Tuminelli of the DeFi Education Fund emphasizes the need for regulatory clarity, stating that most early-stage crypto apps are passive, non-custodial tools that should not be burdened with broker-dealer regulations.

This initiative aims to reduce regulatory uncertainty for crypto developers, especially in light of recent legal actions like the conviction of Tornado Cash’s Roman Storm for operating an unlicensed money transmitter business.

In March 2025, a16z had previously engaged with the SEC regarding safe harbors for network tokens, airdrops, and NFTs, indicating ongoing efforts to shape digital asset regulations.

The proposed safe harbor aims to be flexible, accommodating the evolving nature of blockchain technology and fostering safe innovation within the crypto space.

The proposal aligns with increasing support from the White House and SEC leadership for DeFi, emphasizing that only apps posing traditional market risks should be regulated as broker-dealers.

The SEC's response to this proposal remains pending, and its outcome will significantly influence the future regulatory landscape for DeFi projects.

Historically, the SEC has taken enforcement actions against blockchain apps, claiming some require broker registration, but some investigations, like those involving Coinbase Wallet, have been dropped or dismissed.

The proposal specifies four criteria for qualifying: the underlying protocols must be decentralized, the app must be non-custodial, it cannot provide investment recommendations, and it must have no discretionary control.

This framework would exempt qualifying DeFi apps from broker-dealer registration if they are built on decentralized protocols, do not make recommendations, do not exercise discretion, and are non-custodial.

Meanwhile, Atkins announced 'Project Crypto' to promote regulatory initiatives supportive of the crypto industry, reflecting a shift toward more accommodating policies for digital assets.