What Is the “Safe Harbor” Proposal for Decentralized Crypto Projects?
A "safe harbor" proposal, such as the one suggested by SEC Commissioner Hester Peirce, aims to provide a temporary three-year grace period for decentralized projects to develop their network without the immediate threat of enforcement actions for selling unregistered securities. The idea is to allow innovation to flourish before imposing full securities regulation, provided the project meets certain disclosure and decentralization criteria by the end of the period.
It has not been adopted by the SEC.
Glossar
Decentralized Projects
Architecture ⎊ Decentralized projects, particularly within cryptocurrency derivatives, fundamentally reimagine market infrastructure by distributing control and data across a network, eschewing centralized intermediaries.
Decentralization Criteria
Metric ⎊ Metric for decentralization primarily quantify the distribution of control over a blockchain network or protocol, moving beyond superficial claims of distributed ledger technology.
Proposal
Governance ⎊ Within decentralized autonomous organizations governing crypto derivatives platforms, a Proposal serves as the formal on-chain or off-chain submission for a change in protocol parameters or resource allocation.