Digital currency companies and their Silicon Valley backers are seeking a broad oversight exemption from the U.S. Securities and Exchange Commission (SEC), claiming it would slow digital coin growth.

At the end of March Andreessen Horowitz and Union Square Ventures met up with officials from the SEC to argue that federal oversight in Washington could hamper innovation in the sector, sources familiar with the situation said, according to a report from the Wall Street Journal.

The meetings were also attended by lawyers from Cooley LLP, Perkins Coie LLP, and McDermott Will & Emery LLP, in addition to a lobbyist from the National Venture Capital Association. Scott Kupor, Andreessen partner and general counsel Ryan Ward attended the meeting, as did Union Square’s Brad Burnham and John Buttrick. The group is reported to have met with top officials of the SEC’s Division of Corporation Finance, which regulates initial coin offerings, and the offices of some SEC commissioners.

According to the report, those at the meeting wanted assurance from regulators that their products would be exempt from SEC oversight. Sources say that they argued that the tokens aren’t investments, but products that can be used to access networks or services.

If granted the exemption would mean that startups would be permitted to sell tokens to investors without having to submit financial statements and descriptions of their business.

It remains to be seen whether the SEC will agree with this measure. In recent months, the agency has been taking proactive steps as to how the industry should function. In December, Jay Clayton, the chair of the SEC, said that a ‘number of concerns have been raised regarding the cryptocurrency and ICO markets,’ adding:

…there is substantially less investor protection than in our traditional securities markets, with correspondingly greater opportunities for fraud and manipulation.

More recently, in March, it was reported that the SEC was looking to apply securities laws to digital trading platforms and that they must register with the agency. It claimed that the mechanism for trading assets meets the definition of a ‘security’ under the federal securities laws.

The notice read:

If a platform offers trading of digital assets that are securities and operates as an ‘exchange,’ as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration.

Yet, as authorities ramp up their efforts to monitor the cryptocurrency sector, so too have industry players who have on their boards former regulators, such as former CFTC Chairman Jim Newsome, former SEC member Paul Atkins, and former CFTC Commissioner Mark Wetjen, the WSJ reports.

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