A16z Proposes Safe Harbor for Crypto Airdrops
Miles Jennings, the policy head at a16z crypto, has called for a regulatory safe harbor for crypto airdrops. In a recent report, he argued that current SEC policies under Gary Gensler are harming Americans by excluding them from these distributions.
Jennings believes airdrops are vital for blockchain projects. They help achieve decentralization and reward user engagement. However,the SEC views most airdrops as unregistered securities offerings,even though they are often free.
To address this, Jennings proposes five conditions for airdrops to be exempt from U.S. securities laws. First, the token must be a network token, deriving value from a decentralized blockchain. Second, the blockchain network should already be operational.
- The distribution should be broad and equitable, not limited to private investors.
- The airdrop should be free or based on past network usage.
- Any portion allocated to insiders should be locked for at least one year.
These conditions aim to ensure airdrops are safe, legal, and frequent. Jennings hopes this proposal will lead to more favorable crypto regulations, allowing Americans to participate in the decentralized internet.
