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A duo of heavy-hitting Silicon Valley venture capital firms has asked US regulators to take an industry-friendly approach to initial coin offering (ICO) regulations.

The Wall Street Journal reports that representatives from Andreessen Horowitz and Union Square Ventures met with high-ranking officials at the US Securities and Exchange Commission (SEC) on March 28.

The VC firms, which were joined by lawyers from Cooley LLP, Perkins Coie LLP, and McDermott Will & Emery LLP, asked the agency’s Division of Corporation Finance to give them “formal assurance” that the SEC would not crack down on ICO tokens in which they have invested.

Andreessen Horowitz and Union Square Ventures have long been two of Silicon Valley’s most prolific cryptocurrency investors.

Andreessen, whose motto is “Software is Eating the World,” has invested in numerous ICOs, as well as industry businesses such as Coinbase and OpenBazaar.

USV likewise holds numerous stakes in industry companies, including cryptocurrency hedge fund Polychain Capital and Filecoin creator Protocol Labs.

Notably, both firms contributed to CryptoKitties’ recent $12 million funding round.

Recent public statements from SEC Chairman Jay Clayton have signaled that the SEC believes most ICO tokens are securities, which means that issuers are subject to significant regulatory restrictions when conducting their token sales.

Andreessen and USV pushed the agency to classify more ICOs as utility tokens, which do not constitute investments and are not subject to the SEC’s purview.

“For example, a token that represents a participation interest in a book-of-the-month club may not implicate our securities laws, and may well be an efficient way for the club’s operators to fund the future acquisition of books and facilitate the distribution of those books to token holders,” Clayton said in a speech of the difference between security and utility tokens.

“In contrast, many token offerings appear to have gone beyond this construct and are more analogous to interests in a yet-to-be-built publishing house with the authors, books and distribution networks all to come,” he added.

Citing people familiar with the matter, the report claims that the industry is unlikely to receive a broad regulatory exemption, though officials may be open to narrow exemptions that cap contributions and bar participants from reselling tokens at a profit.

Featured image from Shutterstock.

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