A16z calls for safe harbor rules for crypto airdrops
Prominent crypto lawyer proposes rules for token airdrops
Miles Jennings, Head of Policy and General Counsel at a16z crypto, has published a report calling on U.S. authorities to exclude airdrops from securities laws, provided certain conditions are met.
Under former SEC Chairman Gary Gensler, the agency treated most altcoins as securities, and both token airdrops and sales as unregistered offerings. As a result, many crypto startups deliberately excluded U.S. citizens from airdrops to avoid potential legal trouble.According to some estimates, American users missed out on approximately $5 billion worth of tokens due to being excluded from airdrop campaigns.
Jennings proposes safe harbor for airdrops
Jennings, a well-known crypto lawyer and policy leader at a16z crypto, has proposed the creation of a regulatory safe harbor for airdrops that meet specific criteria.
“Biden’s SEC attack on crypto created perverse incentives that hurt Americans — for example, by excluding them from airdrops and denying them internet property rights. Today we published a short explainer of our airdrop safe harbor proposal,” Jennings wrote on X.
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Criteria for a compliant airdrop
According to Jennings, crypto startups and their airdrops should meet the following conditions:
- The airdrop token must be network-based, meaning its value derives from a decentralized blockchain—not a company—and the network must already be operational.
- Distribution must be broad and fair, not limited to private investors or venture capital firms.
- The airdrop must be either free or based on past usage of the network.
- Any allocation of tokens to insiders must be locked for at least one year to prevent price volatility.
Regulators likely to pay attention
a16z is one of the most influential crypto investors, and Miles Jennings recently became the firm's Head of Policy, replacing Brian Quintenz, who is now a candidate to head the Commodity Futures Trading Commission (CFTC).
Given Jennings’ role and a16z’s prominence, his airdrop safe harbor proposal is likely to be taken seriously by U.S. regulators.
As we wrote, as announced by a16z Crypto General Partner Chris Dixon, the firm has appointed Miles Jennings as Head of Policy, replacing Brian Quintenz, who has been nominated to lead the U.S. Commodity Futures Trading Commission (CFTC) and is awaiting Senate confirmation.
