# a16z Seeks SEC Safe Harbor for Decentralized Exchange Systems

By Riza Dagoc

Canonical URL: https://www.tokenpost.com/news/regulation/23495
Published: 2026-09-24T01:08:09.000Z
Updated: 2026-09-24T01:08:09.000Z

Andreessen Horowitz (a16z) and the DeFi Education Fund are seeking a Securities and Exchange Commission safe harbor for qualifying decentralized exchange systems, including those that facilitate trades in tokenized securities.

The proposal, dated Sept. 14, would create a rebuttable presumption that eligible decentralized exchanges and connected applications are not operating as exchanges under the Exchange Act. The SEC would retain the ability to challenge that presumption if a system creates risks associated with intermediaries.

To qualify, a decentralized exchange would need to be noncustodial, automated, permissionless and credibly neutral. Connected applications would also have to use objective, independently verifiable pricing and market data; avoid discretionary control over routing, pricing, matching or execution; and restrict developer activity to specified technical functions.

The proposal would cover systems handling securities, including tokenized securities. “A safe harbor grounded in objective, technology-based criteria would provide regulatory clarity,” said Miles Jennings, Head of Policy & General Counsel at a16z Crypto.

The Sept. 14 request preceded the SEC’s Sept. 17 temporary relief for permissioned Tokenized Securities Venues. The five-year relief allows those venues to trade tokenized National Market System stocks through automated market makers and liquidity pools. It includes symbol and volume limits, procedures allowing issuers to object to third-party tokenized stocks, public and auditable smart contracts, and requirements to halt tokenized-stock trading when the underlying stock is halted. The SEC’s limited path for permissioned tokenized U.S. stock trading does not create a broad exemption for decentralized finance.

A separate Sept. 14 a16z proposal would create a crypto-asset trading-platform framework modeled on the alternative trading system regime. Qualifying platforms could notice-register with the SEC and trade security and nonsecurity pairs, as well as pairs involving only nonsecurities.

The proposals raise whether software that enables direct transactions through smart contracts should face the same rules as a conventional exchange or intermediary. SIFMA has supported tokenization but warned that multiple tokenized versions of U.S.-listed securities could trade across parallel venues, fragmenting prices and liquidity and creating investor confusion. It called for limits on duration, customers and transactions.

“We are concerned about its impact on investor protection and market integrity,” said Kenneth E. Bentsen Jr., SIFMA’s president and CEO, referring to the SEC’s Innovation Exemption.

The SEC has not announced whether it will approve, reject or set a timetable for the proposed safe harbor.

## Links in this article

- [The SEC’s limited path for permissioned tokenized U.S. stock trading](https://www.tokenpost.com/news/regulation/23480)