A16z and DeFi Education Fund Advocate for Regulatory Safe Harbor for DeFi Apps

Andreessen Horowitz (a16z) and the DeFi Education Fund have formally proposed a regulatory SAFE harbor framework for decentralized finance (DeFi) applications. The initiative seeks to exempt qualifying projects from broker-dealer registration requirements under U.S. securities laws.

The proposal addresses current regulatory ambiguities where DeFi applications face potential classification as brokers despite operating on decentralized protocols. Four key criteria define eligibility: decentralized underlying protocols, non-custodial operations, absence of investment recommendations, and no discretionary control over user assets.

This MOVE comes as the SEC has previously targeted DeFi projects through enforcement actions, arguing that developers facilitating securities transactions may qualify as brokers. The safe harbor framework aims to protect genuinely decentralized applications while maintaining regulatory oversight where appropriate.