The U.S. SEC is presently working with the crypto industry to obtain in-depth understanding of what works for the ecosystem and what changes can be implemented to improve conditions. In a fresh development the Solana Policy Institute has asked the SEC to exempt developers from the DeFi space from having to follow rules drafted for crypto exchanges.
Solana Policy Institute was responding to a query from the SEC that wished to understand how it could protect Web3 developers create software and test transactions directly without encountering regulatory barriers.
Responding to the query, the Solana body said developers should not be treated as exchanges or alternate trading services.
As per the institute, “establishing clear, durable lines between software tools and actual intermediaries that exercise custody, discretion, or control over funds or transactions,” can be among the first steps that the SEC can take to help developers from the DeFi space.
SEC’s rules for U.S.-based crypto exchanges lay focus on investor protection, registration requirements, and custodial specifications among others.
The Solana institute expressed fear that overboard rules could not only discourage local talent from contributing to the ecosystem but also push them offshore.
“Software developers who publish or maintain non‑custodial tools do not meet the functional profile of an operator. They do not receive or store customer orders, maintain order books, or match counterparties. They do not decide who may access the system, custody assets, or act as counterparties,” the response from Solana Policy Institute read.
The response was submitted to the SEC on January 9.
The Solana Policy Institute was founded by core members of the Solana ecosystem in April 2025. Its aim is to spread education around DeFi and crypto among lawmakers and general public.