DeFi Debrief

Week of September 8, 2025: New Draft of Market Structure; New DEF Amicus Brief; SEC Rulemaking Agenda; CFTC & SEC Joint Statement; Letter on DAOs; Upcoming Congressional Hearing

Senate Banking Committee Releases Digital Asset Market Structure Legislation 

On September 5, 2025, the Senate Banking Committee released an updated draft of digital asset market structure legislation. The draft bill, entitled, “The Responsible Financial Innovation Act of 2025,” aims to establish a regulatory framework for digital assets in the United States. Team DEF is unpacking the bill – but on first glance, it is one of the strongest pieces of draft legislation to protect noncustodial software development in the United States. 

DEF applauds the work of the Senate Banking Committee and is encouraged by the inclusion of developer protections in the base text of the bill, as we requested, joined by 115+ signatories in our recent coalition letter to the Senate. 

DEF Files Amicus Brief in DeFi Patent Case

On September 3, 2025, DEF and the Solana Policy Institute (SPI) filed an amicus brief in support of Uniswap Labs and the Uniswap Foundation’s motion to dismiss patent-related claims brought by Bprotocol Foundation and LocalCoin. These entities, tied to the Bancor Protocol, assert ownership of two U.S. patents that purport to cover methods of calculating exchange rates between tokens on a blockchain.

In practice, the patents describe little more than using a mathematical formula to set token prices in smart contracts—a concept that predates blockchain and was widely understood before Bancor introduced its Constant Product Automated Market Maker (CPAMM) model in 2016. Bancor filed patent applications in 2017, and now claims that Uniswap’s 2018 launch infringed on its intellectual property. These patents are being deployed offensively against Uniswap despite their lack of genuine novelty. As our brief makes clear, “these patents seek to capitalize on emerging technologies by attempting to claim abstract ideas merely by applying them in the context of the latest technologies.” 

Under the Supreme Court’s Alice framework, courts must ask whether claims are directed to an ineligible concept and, if so, whether they add an “inventive concept” that transforms them into patent-eligible applications. The challenged claims fail both steps. 

If patents like these are upheld, startups and small developers—the lifeblood of DeFi innovation—may be deterred from entering the market by the looming threat of costly, and often frivolous, litigation by so-called “Patent Trolls.” As we argue, “even the perceived risk of patent litigation would discourage market entry and creativity, chilling a transformative financial industry that could bring many benefits to the public.” That outcome would undermine the very purpose of the patent system: to reward genuine innovation, not opportunistic rent-seeking.

For broader context on why invalid patents attacks threaten software development, see DEF’s prior successful work on safeguarding builders in the patent arena. DEF and SPI are proud to support Uniswap in urging the court to dismiss these claims. You can read our full amicus brief here.

SEC Releases Crypto Rulemaking Agenda 

On September 4, 2025, the Securities and Exchange Commission (SEC) released its Spring 2025 Unified Agenda of Regulatory and Deregulatory Actions, representing the SEC’s renewed focus on supporting innovation, capital formation, market efficiency, and investor protection.

Notably, the regulatory agenda covers potential rule proposals related to the offer and sale of crypto assets, which could include exemptions and safe harbors, to help clarify the regulatory framework for crypto assets and provide greater certainty to the market. It also considers potential amendments to the Consolidated Audit Trail (CAT), which DEF has written about in the past.  

In a statement on the regulatory agenda, SEC Chair Paul Atkins said his priority is to provide “clear rules of the road for the issuance, custody, and trading of crypto assets while continuing to discourage bad actors from violating the law” and emphasized that the agenda reflects SEC’s commitment to “align with the goal that regulation should be smart, effective, and appropriately tailored within the confines of our statutory authority.” 

DEF is thrilled to see the SEC formally consider a regulatory safe harbor rulemaking, which had been previously raised by SEC Commissioner Hester Peirce in her Token Safe Harbor Proposal 2.0 and February 2025 Request for Information.  DEF supports a thoughtfully crafted safe harbor and submitted Guiding Principles for a Token Safe Harbor and Recommendations Regarding a Safe Harbor for Applications from Broker Registration Requirements, with a16z, to the SEC Crypto Task Force.

Stay tuned for more updates and analysis from DEF on the SEC’s rulemaking agenda.

CFTC and SEC Joint Statement on Regulatory Harmonization Efforts

On September 2, 2025, staff of the Commodity Futures Trading Commission (CFTC) and the SEC issued a joint statement regarding the trading of certain spot crypto asset products, marking a cross-agency initiative in furtherance of the SEC’s Project Crypto and the CFTC’s Crypto Sprint. Further, on September 5, 2025, the SEC and CFTC reaffirmed in a joint statement that the previous joint staff statement on spot crypto asset products was just a first step, and reiterated agencies’ commitment to work together to ensure regulation does not stand in the way of progress. Notably, highlighting their intention to establish DeFi innovation exemptions to provide regulatory clarity and foster responsible growth in decentralized finance:

“Today’s decentralized finance (DeFi) protocols enable direct peer-to-peer trading without the need for intermediaries. We reaffirm that both agencies are prepared to consider “innovation exemptions” to create safe harbors or exemptions that allow market participants to engage in peer-to-peer trading of spot, leveraged, margined, or other transactions in spot crypto assets, including derivatives such as perpetual contracts, over DeFi protocols. These safe harbors and exemptions would allow market participants to build commercially viable models while the agencies advance longer-term rulemaking.

The right to self-custody one’s assets is a core American value. While market participants have paths under current law to trade spot crypto on federally regulated venues, the path remains open for peer-to-peer spot crypto trading as well. We encourage market participants to meet with our respective staffs as entrepreneurs onshore trading activity and innovate.”

The statement also announced that a joint SEC-CFTC roundtable on regulatory harmonization will be held on September 29, 2025, and that DeFi innovation exemptions will be a topic for discussion. DEF applauds this coordination and the both agencies’ recognition of the value of decentralized protocols in trading - particularly their role in promoting market integrity, user empowerment, and financial innovation. 

DEF Co-Signs Letter to Treasury Department on DAOs

On September 2, 2025, the Uniswap Foundation, DEF, and sixteen other organizations sent a letter to Treasury Secretary Scott Bessent urging the creation of clear and accessible legal pathways for decentralized autonomous organizations (DAOs). The coalition — which included DEF, The Digital Chamber, Blockchain Association, Crypto Council for Innovation, Solana Policy Institute, Decentralization Research Center, and several other builders in the space — argued that while DAOs are reshaping how communities build and govern digital infrastructure, persistent legal uncertainty has pushed many offshore and left participants exposed to personal liability.

The letter points to Wyoming’s 2024 Decentralized Unincorporated Non-Profit Association (DUNA) law—likely to be adopted by Uniswap DAO in the passage of Uniswap’s Governance Proposal—as a fit-for-purpose model. A DUNA enables DAOs to contract, manage treasuries, and comply with taxes while protecting token holders from unlimited liability. Treasury and the IRS, the letter argues, should recognize and support such good-faith efforts, engage directly with communities piloting DUNA-like frameworks, and provide federal clarity through safe harbors, interpretive guidance, or tailored rulemaking.

Alongside the letter, the Uniswap Foundation launched a commemorative token on Zora, with token proceeds to be donated to DEF. DEF is proud to co-sign Uniswap’s efforts, which reflects our ongoing commitment to ensuring DAOs have viable, U.S.-based legal frameworks to support innovation and compliance. Take a look at Uniswap’s letter to Treasury here, and view Uniswap’s Zora token here.

DAOs Rally Behind Wyoming’s DUNA Statute

On September 2, 2025, Uniswap governance opened an onchain vote on the “DUNI” proposal to register as a Decentralized Unincorporated Nonprofit Association (DUNA) under Wyoming’s 2024 statute. At the time of writing, over 50 million UNI votes had been cast—about 25% of the total supply—with more than 99% in favor of the DUNA. 

The DUNI proposal would give the DAO a U.S. legal wrapper to sign contracts, pay service providers, and handle taxes, shifting liability away from token holders. Courts have increasingly treated DAOs as partnerships, exposing members to risk, but the adoption of a DUNA makes the entity itself responsible. For more background, read DEF’s blog here. 

On August 26, Syndicate, which builds infrastructure for community-owned investment clubs and appchains, announced that it is forming the Syndicate Network Collective, one of the first DUNAs to launch in the United States. Syndicate framed the move as “built in America, owned by the community.” In its announcement on X the project described itself as “one of the first decentralized networks to be built and launched in America,” established entirely under Wyoming law with no offshore entities, and called it a major step forward for the U.S. crypto industry. Like DUNI, Syndicate’s wrapper will let its network manage assets and enter contracts under U.S. law without compromising onchain governance.

Together, these parallel moves by Uniswap and Syndicate signal that Wyoming’s DUNA statute is emerging as a preferred framework for crypto projects seeking to operate transparently and compliantly in the United States while preserving the ethos of decentralization.

Upcoming HFSC FinCEN Hearing 

On August 20, 2025, House Committee on Financial Services (HFSC), led by Chairman French Hill (R-AR), announced a list of hearings and markups for September 2025, covering a broad range of topics including banking, fraud, and AI.

The first hearing, titled “Evaluating the Financial Crimes Enforcement Network (FinCEN),”will take place this week on September 9, 2025 at 10:00 AM and will be conducted by the National Security, Illicit Finance, and International Financial Institutions Subcommittee. Click here to view the livestream of this hearing. DEF will closely follow the hearing and report any potential impacts on DeFi.

DeFi Dictionary

Congress is back from recess, and the conversations about digital asset market structure are already underway. Want to understand the core features of digital assets? Let’s see our word for this week:

Notable and Quotable