DeFi Debrief

Week of 10/13/25: DoubleZero No Action Letter; SEC & CFTC Roundtable; Crypto Tax Updates; New DEF Blog

SEC Issues No Action Letter to DoubleZero 

On September 29, 2025, the Securities and Exchange Commission’s (SEC) Division of Corporation Finance issued a no-action letter to DoubleZero Foundation indicating it would not recommend an enforcement action in connection with certain programmatic transfers of 2Z tokens without registration under securities laws, provided the transfers stay within the parameters outlined in DoubleZero’s no-action request to the SEC. The letter is first-of-its-kind on decentralized physical infrastructure networks (DePIN) and a critical step forward for the American digital assets industry. 

In a separate statement, SEC Commissioner Hester Peirce welcomed the decision and explained how DePIN represents a novel way of providing real-world capabilities through open and distributed peer-to-peer networks. Commissioner Peirce noted that DePIN tokens like 2Z are programmatically distributed as “compensation for work performed or services rendered,” distinguishing them from capital-raising transactions that Congress charged the SEC with regulating.

A no-action letter means the SEC agrees not to recommend enforcement based on the facts presented to them, but the assurance applies only if the actual conduct matches the described facts. This no-action letter marks a constructive step in engagement between the SEC and the DeFi community. For more background on no-action letters, read DEF’s blog here.

SEC-CFTC Agency Harmonization Roundtable 

On September 29, 2025, the SEC and the Commodity Futures Trading Commission (CFTC) held a joint roundtable focusing on regulatory harmonization efforts between the two agencies. The roundtable brought together regulators and market participants to discuss the relationship between the SEC and the CFTC, and future cooperation on crypto regulation.

During the roundtable, SEC Chair Paul Atkins and CFTC Acting Chair Caroline Pham recognized that, as regulators, they must build a framework where agencies coordinate seamlessly, reduce duplicative regulation, and give markets the clarity they deserve to reach full economic potential. SEC Commissioner Hester Peirce emphasized that the two agencies should “coordinate to develop appropriately conditioned exemptions.” Overall, the roundtable signaled a shared intention to move beyond regulatory fragmentation towards the age of harmonized, innovation-friendly oversight.

Of the topics covered, panelists notably discussed the need for innovation exemptions, including in decentralized finance (DeFi). The discussion highlighted the importance of ensuring such exemptions are focused on investor protections, while others underscored the need for a single standard for innovation exemptions. 

Crypto Tax Updates

On October 1, 2025, Senate Finance Committee Chairman Mike Crapo (R-ID) held a hearing titled “Examining the Taxation of Digital Assets” to discuss special tax treatment for crypto, including measures on staking and mining rewards, as well as whether there should be a de minimis exemption for small crypto transactions. Republicans and Democrats agreed that clearer rules are needed to improve compliance and provide certainty for taxpayers and the Internal Revenue Service (IRS) on what is subject to tax. As Chairman Crapo noted in his opening statement, “the cryptocurrency ecosystem is diverse in its products and functions, and our tax code must appropriately adapt to reflect a more comprehensive and durable approach.”

Further, on October 6, 2025, Treasury Secretary and Acting Commissioner of the IRS Scott Bessent announced that Frank Bisignano, Commissioner of the Social Security Administration, will serve as chief executive officer of the IRS. In this newly created role, Commissioner Bisignano will oversee IRS operations and report directly to Acting Commissioner Bessent.

Crypto tax issues continue to evolve rapidly in Congress. Representative Max Miller (R-OH), a prominent supporter of digital assets and innovation, is advancing digital asset tax treatment legislation, while on the Senate side, Senator Cynthia Lummis (R-WY) recently introduced a digital asset tax framework. Critical for both bills will be ensuring that DeFi technology is differentiated from centralized financial intermediaries. 

DEF Blog on Roman Storm Trial Motions 

On September 25, 2025, DEF published a blog on Rule 29 and Rule 33 post-trial motions in light of Roman Storm’s trial and conviction. On August 6, a jury in the Southern District of New York returned a partial verdict convicting Storm on one count of conspiracy to operate an unlicensed money transmitting business under 18 U.S.C. § 1960, but were deadlocked on the more serious money-laundering and sanctions charges. Our blog explains how Rule 29 tests the legal sufficiency of the evidence and, if granted, would result in an acquittal, while Rule 33 permits a new trial in the interests of justice, allowing a judge to weigh credibility, trial errors, or newly discovered evidence. Storm opted not to file a separate Rule 33 motion for strategic reasons, focusing his post-trial challenge on Rule 29.  In rare cases like this, Rule 29 and the court’s conditional new-trial authority supply critical lifelines, and DEF will continue tracking developments as the court rules. Click here to read DEF’s full blog which situates the motions within the broader debate over whether non-custodial, open-source software can be treated as a money-transmitting business.

DEF Op-eds on National IPSOS Data 

A new national survey by DEF and Ipsos’ KnowledgePanel shows that Americans are increasingly disillusioned with the financial status quo and eager for alternatives that deliver lower fees, transparency, and real control over their money. Americans’ appetite for autonomy spans from how they bank to how their data is used. Writing for Cointelegraph, DEF’s Research Director, Lizandro Pieper, notes that most Americans no longer trust traditional institutions to safeguard their personal and financial information. The DEF-Ipsos study found that a majority of respondents feel unsafe using conventional financial services, a concern sharpened by the more than 3,000 data breaches reported in 2024. Pieper writes that DeFi offers a privacy-preserving model that returns both finances and information to individuals, and urges Congress to modernize surveillance laws to protect developers building systems that treat privacy as a public good.

On September 30, 2025, RealClearMarkets published an op-ed by DEF’s Gavin Zavatone and Uniswap Labs’ Lindsay Fraser that highlights how DeFi offers an open, user-driven model of finance that aligns with public demand. Moreover, nearly 40% of Americans said they would try DeFi if available, citing lower costs, stronger security, and autonomy as motivators. And almost half said they would be likely to do so if Congress enacted clear, consistent rules of the road.

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

DeFi Dictionary

Banks and governments might shut down, but blocks are produced 24/7/365. Block production is the heartbeat of a blockchain, keeping the network secure, steady, and alive. As Americans demand financial systems that run around the clock, block production shows what nonstop, peer-to-peer finance looks like. That constant pulse inspired this week’s word: block production. 

Notable and Quotable