Solana Policy Institute urges SEC to exempt DeFi developers from exchange rules
The Solana Policy Institute urged the SEC to distinguish non-custodial DeFi code from exchanges, warning that current rules could chill innovation.
The Solana Policy Institute, a nonprofit focused on blockchain policy, urged the US Securities and Exchange Commission (SEC) to distinguish between centralized crypto exchanges and non-custodial decentralized finance (DeFi) software, arguing that developers should not be regulated as intermediaries.
The Friday letter urges the SEC to protect the developers of DeFi apps by recognizing that developing and publishing non-custodial code is not the same as intermediating or controlling the underlying funds.
The letter argues that treating developers of non-custodial protocols under the Exchange Act 3b-16 would be inappropriate, as this applies to exchange operators that custody assets, control execution flow and act as intermediaries: