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Here’s what the DeFi Education Fund (DEF) has been up to in October. If you have any questions or would like to learn more about a specific activity, please do not hesitate to reach out at contact@defieducationfund.org.
DEF Files Amicus in Harper Appeal
On October 20th, DEF submitted an amicus brief in the Harper v. IRS appeal (pending in the First Circuit) to ensure the court understands the unique Fourth Amendment concerns in allowing the government unfettered access to US citizen’s crypto tax history.
For background, this case concerns a “John Doe” summons the IRS sent to Coinbase that resulted in the collection of info about 8.9 million transactions by 14,355 Americans (none of whom were accused of any wrongdoing prior to the summons).
Our brief focused on the Fourth Amendment questions this type of collection raises for American citizens engaging with digital assets. Specifically, we argue that the Court must take into account core differences between crypto technology and TradFi because blockchain data provides the government with an intimate view into a person’s financial life in the past, present, and future.
We are thankful for our partners at Consovoy McCarthy for help in drafting this submission.
You can read the full brief here.
Launching Microsite to Encourage Comments on Treasury’s Proposed “Broker” Rulemaking
In mid-October, DEF launched a new, tailored microsite aimed at encouraging the general public to submit comments to the IRS on its misguided “broker” rulemaking.
As we have stated previously, the expanded definition would mandate the reporting of personal identifying info of customers in recognition of the fact that some digital asset trading platforms have a policy of not requesting customer information or requesting only limited information. The outcome of this would be essentially a ban on DeFi in the United States.
Recognizing that there needs to be an easy tool for concerned citizens to make their voices heard, DEF created and launched a microsite that provides users with multiple options to submit a comment letter to the IRS, including a new AI-powered tool created by our friends at LexPunk.
DEF Responds to Autorite des Marches Financiers (AMF) regarding its DeFi Paper
Also in mid-October, DEF submitted a comment letter to France’s Autorité de Marchés Financiers (AMF) concerning their DeFi regulatory discussion paper.
In our submission, we agree with AMF’s sentiment that if a blockchain protocol is permissioned then it is not decentralized. However, AMF’s paper does not specify how they intend to evaluate this so we request a follow up proposal outlining the details of this plan.
Topics that we covered in our response include:
Stop/start mechanisms for smart contracts;
Calling on AMF for further guidance on “ad hoc” regulatory approach to DeFi;
Discouraging an approval process for smart contracts;
The administrative burden and technical challenges of requiring whitepapers for every smart contract;
Decentralization of off-chain elements; and
Concentration risks of DAO governance and the importance of pseudonymity.
We are grateful for AMF’s engagement on these issues and you can read our full submission here.
Update in DEF’s Fight Against a Patent Troll
Back in September, DEF filed a petition with the United States Patent and Trademark Office (“USPTO”) seeking to initiate an inter partes review (“IPR”) and cancellation of all claims in a patent owned by True Return Systems LLC (“TRS”).
TRS had 90 days to respond, HOWEVER, just 30 days after we submitted our petition TRS responded. Their response was not accompanied by any exhibits and does not cite an expert.
You can read TRS’s response here and we will be sure to keep the community informed on the progress of this IPR.
Media
Print/Online
Law360: Crypto Group Urges 1st Circ. To Revive IRS Doc Seizure Suit
A New Hampshire federal court failed to understand the distinctive features of cryptocurrency technology when it determined that the seizure, issued by John Doe summons, did not violate James Harper's Fourth Amendment right to privacy, DeFi Education Fund argued in an amicus brief. DeFi is a research group that advocates for the benefits of decentralized finance, including cryptocurrency.
Decrypt: Taxes Targeting DeFi Would be ‘Awfully Challenging’: Coinbase VP
Today, Washington, D.C. nonprofit Defi Education Fund said on Twitter that “the proposed ‘broker’ rulemaking… must be stopped” because it would raise “serious tax policy and privacy concerns.”
Bankless: You Can Protect DeFi
Authored by Miller Whitehouse-Levine & Jason Schwartz
Cointelegraph: Crypto advocates file amicus brief to address users’ Fourth Amendment privacy rights
Cryptocurrency advocacy group the DeFi Education Fund (DEF) has urged a United States court to consider the unique aspects of blockchain technology when evaluating the privacy rights of cryptocurrency users under the Fourth Amendment of the U.S. Constitution.
Podcasts
Bankless Podcast: The US Government is Trying to Kill Crypto
We need to stop the US from killing crypto. The new IRS proposals could effectively destroy DeFi and other crypto use cases. The good news? We can change this. 5 minutes is all it takes to leave a comment and get the interpretation delayed. In this episode, we bring on Miller Whitehouse-Levine of the DeFi Education Fund and tax lawyer Jason Schwartz to discuss the proposed rules and their catastrophic implications.
On the Brink: Amanda Tuminelli on the DeFi Education Fund (EP.463)
Amanda Tuminelli of The DeFi Education Fund joins the podcast. In this episode we discuss: Amanda’s background and path to joining The DeFi Education Fund; The IRS “broker” rulemaking process and its potential impact on DeFi; The SEC’s “Exchange” rulemaking process; DEF’s amicus briefs on SEC vs. Coinbase; and Patent trolls in the DeFi ecosystem
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.
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