Crypto Industry Lobby Group: US SEC Should Ease Regulation on Most DAOs

According to a report by Jinse Finance, the DeFi Education Fund and the Uniswap Foundation claim that the U.S. Securities and Exchange Commission should adopt a laissez-faire approach towards Decentralized Autonomous Organizations (DAOs) and not subject them to regulatory oversight. In a letter dated May 27 to Hester Peirce, head of the SEC's crypto working group, they argue that if a DAO is "sufficiently decentralized," it should not fall under the Howey test for defining securities, as these organizations cannot be clearly identified and are not a coordinated group. They state that unless there is evidence to the contrary, DAOs should be regarded as individuals or a group of individuals. The letter states: "If a DAO has a widely distributed group of token holders who have the opportunity to actively participate in and govern the organization and its network, then the organization is sufficiently decentralized such that neither its network tokens should be considered securities, nor should transactions involving those network tokens be considered securities."