DeFi Debrief

Week of September 22, 2025: New National Research from DEF & HFSC Hearings

DEF and IPSOS Released New National Research

On September 18, 2025, DEF and Ipsos released new national research, based on an extensive survey and a series of  in-depth interviews, providing fresh insights into how Americans view the financial system and emerging technologies like crypto and decentralized finance (DeFi).

The findings highlight that Americans are frustrated with financial institutions, want greater control over their financial assets and data, and believe that innovations can support affordability, equity, and consumer protection in finance, particularly as we build the next generation of U.S. financial services.

Click here to read more on the research, with downloadable slide deck and topline findings.

House Financial Services Committee (HFSC) Hearings

“Unlocking the Next Generation of AI in the U.S. Financial System for Consumers, Businesses, and Competitiveness”

On September 18, 2025, the House Financial Services Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence (AI) held a hearing entitled, “Unlocking the Next Generation of AI in the U.S. Financial System for Consumers, Businesses, and Competitiveness.” The hearing focused on emerging technology in the financial system, assessing its deployment in financial markets and the current regulatory framework.

The committee members recognized that AI technology presents some risks, such as data exploitation and privacy issues, and suggested privacy enhancing technologies may be a solution. As Matthew Reisman, Director of Privacy and Data Policy at the Center for Information Policy Leadership, noted in his written testimony: “Privacy-enhancing technologies, or PETs, can reduce risks associated with the use of personal data. Examples include synthetic data . . .  and differential privacy . . . Policymakers should encourage continued research on and use of PETs.”

Rep. Warren Davidson (R-OH) discussed the importance of privacy and the need to update the current regulatory framework. He highlighted that “technology never exists in a vacuum, and I've long warned about the erosion of our Fourth Amendment protections in the digital age . . . The Bank Secrecy Act [] long ago obliterated any real claim to privacy in your financial dealings.” 

Daniel Gorfine, Founder & CEO of Gattaca Horizons, added: “Ultimately, financial regulators need to be recognizing that there are these developing privacy enhancing tools and making sure that regulated financial institutions can use those technologies so data can be encrypted. We can avoid creating honeypots of information that are being sent every which way. And the reality is today, all of our information, driver's license photos, have an email sent to every single provider. There's a better way to move encrypted information and limit accessory importance . . . I like zero knowledge proofs and ways to protect data that way. The government, in some cases, artificially limited that.”

Although the hearing did not directly touch on crypto or DeFi, it highlighted the importance of data privacy, modernizing regulations, and the need for privacy enhancing technologies. These themes are in line with recent statements from Securities and Exchange Commission (SEC) Commissioner Hester Peirce, who emphasized why we should embrace privacy-protecting tools as policy solutions. On October 17, 2025, the SEC’s Crypto Task Force will host a public roundtable on financial surveillance and privacy to discuss cutting-edge technologies and policy considerations to protect individual privacy.

“Fraud in Focus: Exposing Financial Threats to American Families”

On September 18, 2025, the HFSC Subcommittee on Oversight & Investigations held a hearing entitled, “Fraud in Focus: Exposing Financial Threats to American Families.” While Committee members raised a range of concerns, those related to crypto mostly revisited two well-worn themes: kiosk-based cash-to-crypto scams targeting seniors and uncertainty about the treatment of decentralized protocols.

Rep. Sam Liccardo (D-CA) stated that “set[ting] up rules to govern cryptocurrency” is “long overdue,” and asked, “What do we do about DeFi that wasn’t addressed in the bill [Clarity Act] that passed through the House?” He also suggested clearer user disclosures distinguishing DeFi from centralized exchanges.

Carla Sanchez Adams of the National Consumer Law Center urged Congress to extend the Electronic Fund Transfer Act (EFTA) to crypto, arguing that the U.S. should “update EFTA to include fraudulently induced transfers—following the example of the U.K., which recently adopted rules reimbursing victims of authorized push-payment fraud with industry recognition.” When pressed on unhosted wallets, she analogized wallet-to-wallet payments to cash—“if I have an unhosted wallet… it’s like I’m giving them cash”—and noted such wallets “can’t be regulated the same way as a bank,” though they remain subject to criminal fraud laws.

DEF’s position—consistent with our comments submitted to the CFPB—is that EFTA’s chargeback model does not map onto decentralized, non-custodial systems. Even if it were possible, imposing EFTA-style chargebacks would require inserting custodial checkpoints or pushing compliant actors offshore—raising compliance obligations and false-positive costs, fragmenting liquidity, and creating a chargeback hazard scammers can exploit. DEF firmly believes that self-custody setups, in which users control their own private keys, cannot and should not be subject to EFTA. For DEF’s full argument, take a look at our March 2025 comment letter in response to the CFPB’s proposed rules under the EFTA here.

DeFi Dictionary

According to the national research from DEF and Ipsos, more than half of Americans agree that we should “have a way to digitally send money to people without any third party involved.” (51%) This inspired our word of the week: 

Notable and Quotable