The DeFi Debrief

Week of June 9, 2025: Market Structure Updates; HFSC Hearing on Financial Data Privacy; SEC on Staking; Roman Storm Update; SEC Roundtable on DeFi

Congress Proceeds on Digital Asset Market Structure Legislation

On May 29, 2025, House Financial Services (HFSC) and House Agriculture (House Ag) Committee Leadership, led by HFSC Chairman French Hill (R-AR) and with several co-sponsors, introduced the Digital Asset Market Clarity Act (CLARITY Act), a bipartisan effort that supports innovation by establishing a regulatory framework for digital assets in the United States.

HFSC and House Ag held a hearing on June 4, entitled: “American Innovation and the Future of Digital Assets: From Blueprint to a Functional Framework” — during which witnesses emphasized the need for legislation to classify assets, assign agency jurisdiction, protect consumers, and provide certainty to the market.  

Katherine Minarik, Chief Legal Officer at Uniswap Labs, during her testimony, emphasized the need for legal clarity to protect blockchain developers and promote a fair, open ecosystem. Throughout her testimony, Minarik stressed the importance of protecting self-custody and software developers through market structure efforts, including a call to integrate the Blockchain Regulatory Certainty Act into the legislation. We include highlights from her remarks in an X article here. 

Next up? HFSC will mark up the legislation on Tuesday, June 10, a key step in the legislative process during which committee members will debate, amend, and vote on the text of a bill. This step determines whether the Committee advances the bill to the full House floor for consideration and inclusion in a house rule for debate. 

DeFi Education Fund is grateful to the Committees and their staff for working tirelessly to bring regulatory clarity to the digital assets space. The DEF team remains focused on ensuring that DeFi technology and market participants are accurately described, properly classified, and appropriately represented in market structure legislation. Stay tuned for updates and analyses from our team.

Calling for Inclusion of BRCA in Market Structure Legislation

On June 5, 2025, DeFi Education Fund, Coin Center, Solana Policy Institute, The Digital Chamber, Blockchain Association, Crypto Council for Innovation, Paradigm, and Bitcoin Policy Institute issued a joint statement, and collectively urged Congress to incorporate the bipartisan Blockchain Regulatory Certainty Act (BRCA) into the upcoming market structure legislation.

“As much-needed digital asset regulation develops in the United States, it is critically important to remember that developers creating peer-to-peer, non-custodial software and the infrastructure providers who enable decentralized networks have little in common with traditional financial institutions and should not be treated as such. The BRCA acknowledges this reality and ensures that when software developers or blockchain service providers do not control or custody customer funds, they are not inappropriately required to register as “money transmitting businesses” or liable for failing to do so.”

DEF applauds the efforts of Representatives Emmer and Torres for their leadership on this issue, and we strongly encourage the House of Representatives to include the BRCA in the Digital Asset Market Clarity Act of 2025 and ensure that innovators across America can safely build financial infrastructure.

For more information on the BRCA, check out DEF's helpful one-pager on the legislation.

HFSC Hearing on Financial Data Privacy

On June 5, 2025, the House Financial Services Committee convened to discuss data privacy in the financial system — ensuring consumer data and innovation are both protected. The Committee titled the hearing: “Framework for the Future: Reviewing Data Privacy in Today’s Financial System.” During the hearing, the Committee debated proposed legislation to require financial institutions to provide privacy notices, implement safeguards for customer data, and offer consumers the ability to opt-out of certain types of information sharing with non-affiliated third parties.

SEC Releases New Guidance on Protocol Staking Activities

On May 29, 2025, the Securities and Exchange Commission (SEC) Division of Corporation Finance released a statement on protocol staking activities, excluding certain protocol staking activities from the securities framework. The Division clarified that protocol staking activities, particularly those in proof-of-stake (PoS) networks, are not considered selling or offering securities under the securities laws. Self (solo) staking, self-custodial direct third-party staking, and custodial staking-as-a-service were all deemed not to be activities that required registration under securities laws, thereby protecting base layer neutrality.

As Commissioner Hester Peirce explained: “providing security is not a security.”   

We commend the Division of Corporation Finance for recognizing the importance of staking for maintaining the integrity of blockchain base layer infrastructure and for protecting developers of noncustodial staking services who do not offer securities. This statement is a win for developers of staking services providers, blockchain infrastructure, and participants across DeFi markets. 

Roman Storm Case Update: Judge Rejects FinCEN Views as Exculpatory

On May 30, 2025, during a conference call in United States v. Roman Storm, the judge addressed allegations that the government had failed to disclose critical information to the defense in the criminal case against Tornado Cash developer Roman Storm. Storm’s defense argued that correspondence evidencing FinCEN’s internal uncertainty about the Department of Justice’s (DOJ) legal theory underlying the unlicensed money transmission charge should have been turned over earlier in the case. However, Judge Failla ruled that even if such views existed, they would not be exculpatory under Brady. Essentially, Judge Failla said that any FinCEN correspondence on the issue would not impact the outcome of the case. 

Meanwhile, the DOJ denied possessing any FinCEN communications about Tornado Cash and emphasized that Storm is no longer charged with failing to obtain a license under federal law, but is now only charged with transmitting illicit proceeds under 18 U.S.C. §1960(B)(1)(c). The DOJ recently dropped one theory of its three charges against Roman Storm—the Section 1960(b)(1)(B) charge alleging operation of an unlicensed money transmitting business under federal registration laws—but will continue to trial on the other charges. 

The conference in Storm follows revelations from the case against the developers of Samourai Wallet: the disclosure of a senior FinCEN official's views that the non-custodial Bitcoin wallet Samourai Wallet likely does not qualify as a money services business, in direct contradiction to the DOJ’s novel interpretation of Section 1960. 

Software developers of noncustodial peer-to-peer protocols like Tornado Cash clearly do not exercise control or custody over user assets, and are thus not money-transmitting businesses or financial institutions under the Bank Secrecy Act. This principle was clearly reflected in FinCEN’s 2019 Guidance. 

Storm’s trial begins in Manhattan on July 14, 2025. As Storm continues to face prosecution under flawed interpretations of Section 1960, the DeFi community will keep rallying to defend the rights of developers building non-custodial, open-source software. Please consider donating to Storm’s defense fund: https://freeromanstorm.com/

For a longer explanation of the nuances of Section 1960, you can dig into “Through the Looking Glass: Conceptualizing Control and Analyzing Criminal Liability For Unlicensed Money Transmitting Businesses Under Section 1960” written by Amanda Tuminelli, Dan Barabander, and Jake Chervinsky. 

Upcoming SEC Crypto Task Force Roundtable on DeFi and the American Spirit

On June 9, 2025, the SEC Crypto Task Force will host a roundtable entitled: “DeFi and the American Spirit.” DEF will be represented by Board Member Rebecca Rettig, Chief Legal Officer at Jito Labs. Michael Mosier, Managing Partner at Arktouros will also be featured on the panel. Other panelists will include Jill Gunter from Espresso Systems, Michael Jordan from DBA, Omid Malekan of Columbia Business School, Gabe Shapiro of MetaLeX, Peter Van Valkenburgh of Coin Center, Erik Voorhees of Venice AI, and Kevin Werbach from the Wharton School of Business.  

DeFi Education Fund will be closely monitoring the event, which will be livestreamed at SEC.gov.