Andreessen Horowitz and the DeFi Education Fund have submitted a joint proposal to SEC Commissioner Hester Peirce. The document outlines a safe harbor framework designed to exempt specific decentralized exchanges from registration requirements under the Securities Exchange Act of 1934.
To qualify for this exemption, a protocol must meet four criteria: it must be non-custodial, execute trades automatically, operate without permissioned access, and demonstrate credible neutrality. Additionally, front-end applications must utilize objective, publicly available market data.
The proposal argues that applying traditional securities exchange regulations to decentralized software creates a mismatch, as these protocols function more like public infrastructure than centralized intermediaries. The framework is intended to be technology-neutral and does not name specific projects.
This submission follows a previous proposal from August 13, 2025, which advocated for a broker-dealer safe harbor for DeFi applications. In April 2026, SEC staff issued guidance acknowledging that non-custodial interfaces occupy a distinct regulatory category from custodial platforms.
The initiative aligns with policy directions from SEC Chair Paul Atkins and the President’s Working Group on Digital Asset Markets. Protocols that fail to meet the proposed criteria, such as those with centralized sequencing or discretionary listing processes, would remain subject to standard enforcement.
