The Securities and Exchange Commission has proposed a new regulatory framework — Regulation Crypto — that includes safe harbors for decentralized projects. The White House is now reviewing the rule, a move that signals formal steps to define safe harbors for DeFi protocols. The proposal could reshape how the U.S. treats decentralized finance, offering a path to compliance for projects that meet certain criteria.
What Regulation Crypto proposes
The SEC's proposal is built around safe harbors. Projects that can demonstrate genuine decentralization — no single entity controlling the network, for example — would get a grace period to operate without full registration. The idea is to let DeFi protocols mature before they have to meet the same requirements as centralized exchanges or token issuers.
The rule also lays out technical definitions for what counts as decentralized. That's been a gray area for years. The SEC is trying to draw a line, and the proposal includes a comment period for the industry to weigh in on where that line should sit.
Why the White House review matters
The White House review is the next formal step before the rule can be published for public comment. It's a sign the administration is taking the proposal seriously — and that the SEC is coordinating with the executive branch on crypto policy.
This isn't a rubber stamp. The review process can lead to changes, delays, or even a return to the drawing board. But the fact that it's happening now suggests the SEC expects to move forward with the rulemaking process. The agency has been working on this for months, and the review is a procedural milestone.
After the White House review, the SEC will publish the proposed rule in the Federal Register. That kicks off a formal comment period — typically 30 to 60 days — where the public, industry groups, and other regulators can submit feedback. The SEC will then review the comments and issue a final rule, which could include changes based on what it hears.
The comment period date hasn't been announced yet. The technical definitions in the proposal are likely to draw the most debate. How decentralized is decentralized enough? That question will be at the center of the rulemaking.
The SEC's proposal is based on information from the agency itself. No outside groups or lawmakers have commented publicly on the draft yet — that will come during the comment period.
