The world of decentralized finance (DeFi) faces a significant challenge in navigating the complexities of traditional financial regulations. At the heart of this issue is the SEC’s Howey Test, which categorizes certain entities as securities if they meet specific criteria. This test has sparked debate, particularly concerning decentralized autonomous organizations (DAOs), and advocates are urging the SEC to consider an exemption for these unique structures. The DeFi Education Fund and Uniswap Foundation recently sent a compelling letter to the SEC’s Crypto Task Force on May 27, pushing this argument. Their core argument is simple yet profound: DAOs should not be subjected to the stringent requirements of the Howey Test if they are truly decentralized.