The Solana Policy Institute urged the SEC to distinguish non-custodial DeFi code from exchanges, warning that current rules could chill innovation.
Update (Jan. 13, 2026, 9.45 a.m. UTC): This article was updated to clarify the legal status and jurisdictions of recent cases involving Tornado Cash developers.
The Solana Policy Institute, a nonprofit focused on blockchain policy, urged the US Securities and Exchange Commission (SEC) to clearly distinguish between centralized crypto exchanges and non-custodial decentralized finance (DeFi) software, arguing that developers who publish open-source code should not be regulated as market intermediaries.
In a Friday letter to the agency, the institute said developing and deploying non-custodial smart-contract software is fundamentally different from operating an exchange, as developers do not custody user assets, control transaction execution or exercise discretion over funds.
