Here’s what the DeFi Education Fund (DEF) has been up to in July. If you have any questions or would like to learn more about a specific activity, please do not hesitate to reach out at firstname.lastname@example.org.
Historic Congressional Markups
On July 26th and 27th, the House Financial Services Committee (HFSC) and the House Committee on Agriculture (House Ag) held markups considering a slate of crypto-related pieces of legislation.
The pieces of legislation that were up being considered included:
Considered by both HFSC and House Ag
Considered by HFSC
Considered by HFSC
Considered by HFSC
All four bills were voted out of committee and will be considered by the whole House of Representatives at a date to be determined. If you are interested in learning more about what occurred in the markups, check out our “Weekly Update” on the matter as well as our tweet threads (7/26 & 7/27).
Leading up to the markups, DEF continued to meet with members of Congress and their staff, advocating for sensible policies that will allow DeFi to flourish in the U.S. Our job remains far from over and we look forward to continuing to engage with more members as the bills are considered by the full House.
On July 27th, the DeFi Education Fund submitted a FOIA request to the SEC seeking information related to the SEC’s choice not to file an amicus brief weighing in on whether the “syndicated term loan notes” are securities in Kirschner v. JP Morgan Chase Bank, N.A, despite a request from a federal appeals court to do so.
Traditionally, the view is that syndicated loans are not securities, however when JP Morgan was sued for securities fraud by some institutional investors over a deal that didn’t work out, a federal appeals court decided to ask the SEC to weigh in with its “views on whether syndicated term loan notes” are securities. After the SEC asked for more time twice, they basically told the circuit court “no thanks.”
This is why we decided to jump in. For a securities regulator who is seemingly determined to classify nearly all crypto tokens as securities, it is curious that the agency decided not to provide its logic on whether a more traditional financial instrument is also a security.
For some more details on the request, check out this thread from our Amanda Tuminelli, DEF’s CLO.
Getting Involved in CANSEE Act
On July 19th, Senators Mark Warner (D-VA), Jack Reed (D-RI), Mike Rounds (R-SD), and Mitt Romney (R-UT) introduced the Crypto-Asset National Security Enhancement Act of 2023 (CANSEE Act), a bill that would effectively ban DeFi development in the United States by creating a Catch-22: centralize, or face criminal consequences.
While DEF shares the senators’ goal of reducing the illicit abuse of DeFi, unfortunately, the CANSEE Act does not thread this needle because it would effectively ban DeFi development in the United States. We’re working to develop alternative approaches that can coexist with the core characteristics of public blockchains and protocols while achieving critical policy objectives.
"For anything to be sticky, it's going to need some bipartisan backing," said Miller Whitehouse-Levine, CEO of the DeFi Education Fund, a lobbying group focused on decentralized finance.
“He previously tweeted about being pro-innovation and wanting to keep development of this industry onshore,” DeFi Education Fund CEO Miller Whitehouse-Levine told MM. “Given the contents of the bill, I do think his position has apparently changed.”
The legislation “would effectively ban DeFi development in the United States by mandating centralization,” Miller Whitehouse-Levine, CEO of the DeFi Education Fund, told Blockworks...“Unfortunately, this approach is not only a disproportionate response to the illicit use of DeFi but also risks undermining US law enforcement’s existing insight and reach into peer-to-peer crypto activity.”
Miller Whitehouse-Levine, the CEO of web3 advocacy group, DeFi Education Fund, told The Defiant the congressional meeting is the next “big moment” for U.S. digital asset regulations following last week's ruling in the dispute between the U.S. Securities and Exchange Commission (SEC) and Ripple.
The bill would “effectively ban DeFi development in the country,” argued Miller Whitehouse-Levine, CEO of the DeFi Education Fund, in a statement decrying the legislation. “Unfortunately, this approach is not only a disproportionate response to the illicit use of DeFi but also risks undermining US law enforcement’s existing insight and reach into peer-to-peer crypto activity,” Whitehouse-Levine said.
For up-to-date information about what’s happening in D.C. and what we are up to, please follow us on Twitter @fund_defi and subscribe to our Substack.