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Here’s what the DeFi Education Fund (DEF) has been up to in October 2024. 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.
Updates in Our Case Against the SEC
Opposition to the SEC’s Motion to Dismiss
On Monday, October 21st, DEF and Beba filed our opposition to the SEC’s motion to dismiss our lawsuit, which seeks declaratory and injunctive relief under the Declaratory Judgment Act (DJA) and Administrative Procedure Act (APA).
As a reminder, Beba’s DJA claim seeks a ruling that tokens airdropped for free are not “investment contracts” and the airdrop itself is not a securities offering. Additionally, Beba and DEF's APA claim argues that the digital asset policy adopted by the SEC exceeds its statutory authority and has the effect of a final rule without going through the notice and comment required by the APA.
The SEC’s motion to dismiss argued the amended complaint should be dismissed on procedural and jurisdictional grounds, and did not substantively address the merits of the claims. The plaintiffs responded to each of the SEC’s arguments on standing, ripeness, and sovereign immunity in the opposition.
Check out the full brief at the link.
Industry Amicus Briefs
In late October, industry participants had the opportunity to submit amicus briefs in support of our and Beba’s case against the SEC. Both DEF and Beba are incredibly appreciative of all of the amicus briefs submitted to the court in our pre-enforcement challenge against the SEC. The amici provide important information to the court, explaining why the SEC’s approach to airdrops and its regulation by enforcement campaign against the industry are unlawful, have a significant chilling effect on innovation, and should be stopped.
For a debrief on what each brief said, check out the following DEF Weekly.
And thank you again, a16z crypto Blockchain Association, Coinbase, Coin Center, Crypto Council for Innovation, Investor Choice Advocates Network, Multicoin Capital, Paradigm, Texas Blockchain Council, Union Square Ventures, and Variant.
Speaking About Privacy Rights
On October 24th, DEF’s CEO, Miller Whitehouse-Levine, had the pleasure to participate in the first-ever DC Privacy Summit hosted by Project Glitch and the Coinbase Institute.
Speaking on a panel that focused on privacy policy, Miller argued that a concerning aspect about the Tornado Cash debate is that it's playing out in court, rather than in Congress or through a regulatory agency's rulemaking authority: “I think [it's] a bad way to go about policy making, regardless of whether one is supportive of that policy or not.”
Furthermore, talking about privacy at a high-level, Miller commented, “Privacy means only me...free thought can only be done in private and that is why I think it is a fundamental human right.”
If you did not have an opportunity to attend Miller’s panel or the event as a whole, please check out a playback at the link.
Responding to Proposed Rule Regarding Financial Data
In mid-October, DEF and Blockchain Association (BA) filed a comment letter to nine federal agencies, including the SEC, CFTC, and FDIC, regarding their proposed rule to establish data standards for collections of information reported to the Agencies under Section 124 of the Financial Stability Act of 2010 (FSA), which was added pursuant to Section 5811 of the Financial Data Transparency Act of 2022 (FDTA). The proposed rule seeks to establish data standards to promote transparency, quality, and interoperability of financial regulatory data across federal financial agencies.
We focused our comments on Section 124(c)(1)(A) of the FSA, which requires the joint standards to include a common nonproprietary legal entity identifier (LEI) that is available under an open license for all entities required to report to the Agencies, arguing that the Agencies should reconsider using the LEI as the joint standard because of the costs imposed and certain features of the LEI system.
The full comment letter can be found at the link.
October Financial Disclosures
We are continuing to share a more detailed look into our financial disclosures. You can find the October 2024 breakdown below. If you would like to look at our 2024 financial breakdowns, please click here.
Donations Received | $555,192 |
Grants | |
Lobbyists | $40,000 |
Public Relations | $7,500 |
Policy Litigation | |
Marketing | |
Merchandise | |
Operating Expense | $7,829 |
Payroll and Associated Taxes | $122,381 |
Professional Fees | $125 |
Accounting | $6,150 |
Legal | |
Other Consultants | $1,000 |
Transacting Fees | $422 |
Insurance | $4,647 |
Tax & Licenses | |
Other Overhead | $20,495 |
September Media
Op-Eds
Unchained: Why It’s Critical for the US to Pursue a Pro-Innovation Approach to Software Regulation
Authored by Miller Whitehouse-Levine and Lizandro Pieper
Print/Online
CoinDesk: Privacy as a Fundamental Human Right
Whitehouse-Levine, the CEO of the DeFi Education Fund, said that the most concerning aspect about the Tornado Cash debate is that it's playing out in court, rather than in Congress or through a regulatory agency's rulemaking authority.
"I think [it's] a bad way to go about policy making, regardless of whether one is supportive of that policy or not," he said.
In March, Beba and DeFi Education Fund sued the SEC, arguing that token airdrops cannot violate the so-called Howey Test — the nearly century-old law used to determine whether a transaction represents an “investment contract” — in part because there is no reasonable expectation of profit.
Unchained Crypto: DeFi Education Fund Attacks SEC’s ‘Regulation by Enforcement’ in Beba Lawsuit
The DeFi Education Fund (DEF) took a big swing at the SEC’s aggressive regulation of crypto in a new brief filed in its lawsuit against the agency over airdrops last week, arguing that the SEC’s moves violate federal law. Four amicus briefs subsequently filed by other top crypto legal advocates, as well as Coinbase and several top crypto VC funds, highlight that the suit is being viewed as an opportunity to rein in what the DEF describes as a “regulatory assault.”
Podcasts
Rehash Podcast: The U.S. Election and State of Crypto Policy w/Amanda Tuminelli
In this episode, we’re speaking with Amanda Tuminelli, Chief Legal Officer at DeFi Education Fund, about the latest in crypto policy and what she’s expecting to see leading up to the election next week.
We start out by recapping some of the lawsuits Amanda has helped file against the SEC through DeFi Education Fund and her testimony at the first congressional hearing on DeFi last month, and then we talk about what’s on her radar right now in terms of what the SEC is doing and how she expects the election to impact the state of crypto moving forward.
Real Vision: The State of DeFi: A Deep Dive
It may not be “DeFi Summer” just yet, but the reports of DeFi’s death have been greatly exaggerated. In fact, decentralized finance hit the main stage in U.S. Congress a few weeks ago when House Financial Services Committee’s digital assets-focused subcommittee held a hearing on the subject. One of the people representing the industry at that hearing was Amanda Tuminelli, chief legal officer at DeFi Education Fund. She and the fund’s CEO, Miller Whitehouse-Levine, join Ash Bennington alongside Mona El Isa, CEO of founder at Avantgarde Finance and founder of DeFi protocol Enzyme for an in-depth health check of DeFi.
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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