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DeFi Debrief
- DeFi Education Fund
- 1 day ago
- 8 min read
Week of 8/18/25: Letter from DEF; DEF & a16z Safe Harbor Submission; Verdict in Storm; PWG Report; SEC' Project Crypto; CFTC's 'Crypto Sprint'; EO on Debanking
Happy August Recess! While Congress takes a much-needed break, the DEF Team has you covered with a quick-hitting recap of the most important DeFi policy moves from the past three weeks.
DEF’s Mid-Year Letter from Our Executive Director
On August 13, 2025, DEF’s Executive Director and Chief Legal Officer Amanda Tuminelli shared a mid-year letter explaining the important work that DEF has done since January 2025.
DEF serves as the bridge between policymakers and DeFi, focusing on three core areas:
Defining DeFi by educating lawmakers about the technology itself through DeFi demos, written explainers, and interactive briefings on the technology.
Representing DeFi whenever a court, Member of Congress, or government agency deals with DeFi-related issues.
Mobilizing DeFi by elevating the voices of people building it and creating coalitions to stand strong together.
We also announced the launch of an affiliated 501(c)(3) entity, the DeFi Education Foundation, so donors can support our mission with the added benefit of charitable giving incentives.
The letter concludes with highlights of the DEF team’s accomplishments so far this year. While our efforts have resulted in meaningful progress, we still have a ton of work to do. In 2025, our top policy priority remains clear: protecting software developers from prosecution based on improper interpretations of criminal law Section 1960.
Click here to read DEF’s 2025 Mid-Year Letter.
DEF Submits Response to Senate Banking Committee RFI
On August 1, 2025, DEF submitted a response to the Senate Banking Committee’s Digital Asset Market Structure Request for Information (RFI) and discussion draft of the Responsible Financial Innovation Act of 2025 (RFIA). We focused on questions directly relevant to DeFi, protecting software developers, and self-custody.
We are honored to have some of the leading DeFi builders, investors and advocates join our submission urging the Senate to protect developers: a16z Crypto, Jito Labs, Jump Crypto, Paradigm, Multicoin Capital, Solana Policy Institute, Uniswap Foundation, Uniswap Labs, and Variant Fund.
In responding to the questions posed by the RFI, we outlined the critical issues for DeFi, which you can read in our response here.
DEF’s POV in Media:
DEF and A16z Propose Safe Harbor for Front Ends
On August 13, 2025, a16z and DEF jointly submitted a proposal to the SEC advocating for a safe harbor from broker registration requirements for trading interfaces that enable users to interact with blockchains and smart contract protocols (Apps), including those related to DeFi protocols and NFT marketplaces.
We believe that a safe harbor would provide critical guidance for software developers to build in the United States without fear the securities laws will be misapplied to user interfaces.
To read the full proposal, click here.
DEF’s POV in Media:
Verdict in United States v. Storm
Amanda Tuminelli and Jake Chervinsky of DEF join Bankless co-host David Hoffman to unpack the implications of Roman Storm’s trial. (Aug. 13, 2025)
On August 6, 2025, a jury in the Southern District of New York returned a split verdict in U.S. v. Roman Storm, convicting the Tornado Cash developer on one count of conspiring to operate an unlicensed money transmitting business under 18 U.S.C. § 1960. The jury did not reach a unanimous decision on the conspiracy charges related to money laundering and sanctions evasion, which is a win for Storm.
What’s next? Post-trial motions will be due on September 30, oppositions to the motions will be due on October 31, and reply briefs will be due on November 19. The government will also decide whether to retry the case on the charges of money laundering and sanctions evasion.
Storm’s defense team will likely pursue post-trial motions under Rule 29 (judgment of acquittal) and Rule 33 (new trial) related to the § 1960 count. Successful post-trial motions could vacate the conviction or result in a new trial. Amanda Tuminelli, speaking to Bankless co-host David Hoffman, described these motions as “the best path forward” for Storm. Potential grounds for the motions include improper venue in the SDNY and flawed jury instructions that omitted § 1960’s custody or control requirement. The trial judge acknowledged that the “stability of the verdict” is in play and there were “interesting” issues yet to be resolved. Barring a dismissal of the conviction by the DOJ itself, these motions represent Storm’s best opportunity to overturn the § 1960 count before appealing to the Second Circuit. DEF will continue to support Storm and his team.
Although the verdict does not create nationwide precedent, it marks the first time a jury has endorsed the government’s expansive interpretation of § 1960 to cover non-custodial software development—a theory DEF and others view as legally flawed and dangerous for open-source developers. DEF’s initial discussion of the verdict took place on The Rage’s X Space (Aug. 6), with a more in-depth analysis available on the Bankless podcast featuring DEF’s Amanda Tuminelli and Jake Chervinsky.
Refer to DEF’s blog for more background on the case.
DEF’s POV in Media:
President’s Working Group Releases Report on Digital Assets
On July 30, 2025, the President’s Working Group on Digital Asset Markets (PWG) released its long-awaited report on digital assets, offering clear crypto policy recommendations to federal agencies. The report will likely play a significant role in future legislation.
Established under President Trump’s Executive Order,“Strengthening American Leadership in Digital Financial Technology,” from January 23, 2025, the PWG is composed of administration officials who are tasked with developing regulatory and legislative recommendations to advance the administration’s goals. The report covers key areas such as market structure, banking, stablecoins, countering illicit finance, regulatory treatment of DeFi, and taxation.
DEF was proud to contribute technical expertise to the report, including the custom graphic explaining the architecture of DeFi on page 22 of the report.
SEC Chairman Atkins Announces Project Crypto
On July 31, 2025, Chairman Paul Atkins announced the Securities and Exchange Commission’s (SEC) new initiative, "Project Crypto," during a speech titled, "American Leadership in the Digital Finance Revolution." Project Crypto is a “Commission-wide initiative to modernize the securities rules and regulations to enable America’s financial markets to move on-chain.”
The speech outlined several regulatory priorities.
First, it called for clear rules governing crypto asset distributions, custody, and trading, including bright-line tests to determine whether a crypto asset qualifies as a security.
Second, Atkins advocated for investor choice in custody and trading venues, including the right to self-custody through digital wallets.
Third, he promoted the concept of “super-apps,” which would allow securities intermediaries to offer a wide range of services under a single license, including trading in both security and non-security crypto assets.
Fourth, Atkins addressed the integration of on-chain software systems, including DeFi platforms. He argued that both centralized and decentralized models should have a place in U.S. financial markets and called for regulatory frameworks that distinguish between intermediated and disintermediated activity.
Finally, Atkins proposed an “innovation exemption” to allow new business models and technologies to enter the market without being hindered by outdated regulatory requirements. He advocated for a principles-based approach to compliance that prioritizes commercial viability and innovation. DEF has previously unpacked in our blog how this exemption could potentially impact DeFi.
SEC Statement on Liquid Staking
Under Chairman Atkins’ leadership, the SEC has jumped into action. On August 5th, the Division of Corporate Finance released a statement on certain liquid staking activities, scoping them out of the securities framework. The statement comes after the Division’s May 29 statement on protocol staking, through which SEC staff concluded that certain staking activities were not securities offerings. Division staff clarified that liquid staking activities do not involve securities, and staking receipt tokens are not considered securities unless the underlying crypto assets are part of an investment contract. Therefore, providers and traders of such tokens generally do not need to register these transactions with the SEC unless specific investment contract conditions apply.
DEF commends the Division of Corporation Finance staff for recognizing the importance of staking for maintaining the integrity of blockchain infrastructure and for protecting developers of non-custodial staking services who do not offer securities.
For more on the statement and what it means for crypto, refer to DEF Board Member Rebecca
Rettig’s X thread.
SEC Commissioner Speech on Financial Privacy
On August 4, 2025, SEC Commissioner Hester Peirce delivered a speech at the Science of Blockchain Conference. The speech, titled “Peanut Butter & Watermelon: Financial Privacy in the Digital Age,” focused on the value of disintermediation and financial privacy, and called “fresh thinking” on the Bank Secrecy Act regime and related surveillance programs. Commissioner Peirce urged policymakers to balance national security with civil liberties and privacy protections, suggesting that new technologies can serve as a catalyst to modernizing financial oversight without compromising Americans’ fundamental right to privacy. (Commissioner Peirce’s speech was so good, it inspired our Notable and Quotable this week – see below!)
Commissioner Peirce cited DEF’s policy paper authored by Gavin Zavatone and Henry Michaelson titled: “The Bank Secrecy Act is Broken: Examining the burdens, costs, and failures of the Bank Secrecy Act (BSA), and the potentially disastrous implications of applying the BSA to decentralized finance (DeFi).” In citing the policy paper, Commissioner Peirce highlighted: “DeFi software providers and operators neither accept nor transmit funds on behalf of their users; thus, subjecting them to the BSA framework would effectively impose a de facto ban on non-custodial software, as compliance with BSA obligations for money transmitters (e.g., CTR and SAR filings) is functionally impossible.” This is promising recognition of DeFi technology by the head of the Crypto Task Force.
Commissioner Pierce also cited a paper by DEF Board Members Rebecca Rettig, Michael Mosier, as well as Katja Gilman titled, "Genuine DeFi as Critical Infrastructure: A Conceptual Framework for Combating Illicit Finance Activity in Decentralized Finance."
CFTC Acting Chairman Announces ‘Crypto Sprint’ With First Initiative
August 1, 2025, Commodity Futures Trading Commission (CFTC) Acting Chairman Caroline D. Pham announced that the CFTC will kick off a ‘crypto sprint’ to start implementing the recommendations in the President’s Working Group on Digital Asset Markets report. On August 4th, 2025, the CFTC launched its first initiative in the crypto sprint focusing on trading spot crypto asset contracts that are listed on a CFTC-registered futures exchange (a designated contract market or DCM).
President Trump Signs Executive Order on Debanking
On August 7, 2025 President Trump signed an Executive Order prohibiting federally regulated banks from closing accounts or denying services based solely on a customer’s political or religious beliefs. The order also removes “reputational risk” as a blanket justification for debanking and requires banks to document individualized, risk-based reasons for any account termination, which was an obstacle for many builders in the DeFi ecosystem during Operation Chokepoint 2.0.
The order highlights one of the major benefits of DeFi. In DeFi systems, open, public blockchains are permissionless and peer-to-peer—meaning there is no central intermediary capable of selectively debanking or excluding participants in the same way as a bank.
DeFi Dictionary
This week, DEF partnered with @a16zcrypto to submit a proposed safe harbor to exempt crypto apps—DeFi front ends, NFT platforms, and more—from SEC broker rules.
Our submission is our inspiration for the phrase of the week: Front-Ends
Notable and Quotable
