DeFi Education Fund Urges Senate to Tread Carefully on DeFi Regulation in Joint Letter
Main Idea
The DeFi Education Fund (DEF) and a coalition of crypto firms urge the US Senate Banking Committee to adopt a cautious and nuanced approach to DeFi regulation, warning that current proposals risk criminalizing non-custodial software and stifling innovation.
Key Points
1. DEF and crypto firms submitted a response to the draft Responsible Financial Innovation Act of 2025 (RFIA), advocating for clear distinctions between DeFi developers and intermediaries.
2. The group criticizes current FinCEN guidance used in prosecutions, arguing it could unfairly target developers and calls for legislative clarification.
3. Andreessen Horowitz (a16z) also raised concerns about the draft bill, warning it could create legal loopholes and weaken investor protections, particularly around the treatment of 'ancillary assets'.
4. DEF emphasizes the need for regulatory frameworks that recognize decentralization as a key factor in distinguishing between regulated intermediaries and non-custodial software developers.
5. The response highlights the importance of preemption to prevent a patchwork of state regulations that could hinder DeFi innovation.
Description
The DeFi Education Fund (DEF), a policy advocacy group backed by an early Uniswap grant, has called on the US Senate Banking Committee to take a more measured approach to DeFi regulation. Key Takeaways: DEF urges the Senate to distinguish DeFi developers from intermediaries in regulation. The group warns that current rules risk criminalizing non-custodial software. DEF calls for federal preemption to prevent state-level attacks on DeFi innovation. In a formal response to the draft Responsible Fi...
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