According to Cointelegraph, the DeFi Education Fund and the Uniswap Foundation have urged the Securities and Exchange Commission (SEC) to adopt a hands-off approach regarding the regulation of decentralized autonomous organizations (DAOs). In a letter dated May 27 to Hester Peirce, head of the SEC's Crypto Task Force, the groups argued that DAOs should not be subjected to the Howey test, which defines securities, if they are 'sufficiently decentralized.' They emphasized that DAOs, being non-identifiable and lacking a coordinated structure, should not fall under the same regulatory framework as traditional securities.
The letter further suggested that DAOs should be treated as individuals or groups of persons unless proven otherwise. It highlighted that if a DAO consists of a dispersed collection of tokenholders who actively participate in governance, it should be considered sufficiently decentralized. In such cases, neither the network token associated with the DAO nor transactions involving the token should be classified as securities. This correspondence was in response to Peirce’s statement on February 21, which invited public comments on cryptocurrency regulation.
The SEC's stance on crypto regulation has evolved under the Trump administration, which appointed former crypto lobbyist Paul Atkins to lead the agency. Atkins has expressed that blockchain technology could introduce new forms of market activity. He also criticized the Biden administration's approach to cryptocurrency, emphasizing that the SEC should not hinder innovation. During a May 20 SEC oversight hearing, Atkins announced that the Crypto Task Force's first report would be released in the coming months. The task force is also organizing a series of roundtable discussions with industry stakeholders to further explore crypto-related issues.
