In the Media

Miller Whitehouse-Levine, the chief executive officer of DEF, said in a statement that the suit was targeting SEC "overreach." "DeFi, and crypto broadly, promises to make financial services and the digital economy more accessible, efficient, interoperable, dependable, and consumer-focused," he said. "The SEC currently stands as a barrier to realizing this promise."

Led by Kentucky Attorney General Russell Coleman, the lawsuit was jointly filed in a Kentucky district court in partnership with 17 other Republican attorneys general from Nebraska, Tennessee, West Virginia, Iowa, Texas, Mississippi, Montana, Arkansas, Ohio, Kansas, Missouri, Indiana, Utah, Louisiana, South Carolina, Oklahoma and Florida. The complaint was filed in collaboration with crypto advocacy group DeFi Education Fund, which advocates for sound policy in the decentralized finance space.

But thematically, the bills do the same thing, DeFi Education Fund CEO Miller Whitehouse-Levine told DL News. They look to apply existing regulations to the sector, against its ethos of decentralisation.

Whitehouse-Levine, the CEO of the DeFi Education Fund, said that the most concerning aspect about the Tornado Cash debate is that it's playing out in court, rather than in Congress or through a regulatory agency's rulemaking authority.

In March, Beba and DeFi Education Fund sued the SEC, arguing that token airdrops cannot violate the so-called Howey Test — the nearly century-old law used to determine whether a transaction represents an “investment contract” — in part because there is no reasonable expectation of profit.

“The SEC decided that the vast majority of digital assets, which were long understood to not be ‘securities,’ now are securities,” claimed the DEF and co-plaintiff Beba, an apparel company based in Texas, in their brief filed last week. “The [Administrative Procedure Act] required that the SEC’s policy go through notice and comment and fall within its statutory authority, but the SEC’s policy did neither.”

Amanda Tuminelli, also representing DeFi Education Fund, added that Failla’s decision to dismiss on a “matter of law,” versus considering the factual issues, was “offensive.”

“We knew going in that the standard for this decision is extremely high and this type of motion is almost never granted, but we had hoped the judge would not accept the government’s novel theory of developer liability,” Amanda Tuminelli, chief legal officer at the DeFi Education Fund, told DL News in a statement. “We believe the responsibility for third party criminal use of open-source software should lie with those third parties who intentionally use tools for illicit purposes, not the creator of the neutral tool.”

During a Sep. 26 telephonic conference, District Judge Katherine Polk Failla of the Southern District of New York denied Storm’s motion to dismiss three charges brought against him by the U.S. Department of Justice, according to DeFi Education Fund’s Chief Legal Officer Amanda Tuminelli.

DeFi Education Fund attorney Amanda Tuminelli brought Smart Brevity vibes to a congressional hearing on decentralized finance this week. What they're saying: "First, DeFi is different from and an improvement upon traditional finance, because it does not rely on intermediaries," Tuminelli told the subcommittee on digital assets on Tuesday

Amanda Tuminelli, Chief Legal Officer of the DeFi Education Fund, was more forceful in her advocacy, repeatedly arguing that DeFi is fundamentally different from traditional finance and so required a tailored regulatory approach, rather than one-size-fits-all rules. Consumer education about the risks of DeFi should be prioritized, she said, arguing that the industry has already come up with some solutions in that vein, such as fraud and scam alerts built into frontend software.

Representatives heard from five witnesses: Brian Avello, chief legal officer of UDHC; Rebecca Rettig, chief legal and policy officer of Polygon Labs; Amanda Tuminelli, chief legal officer of the DeFi Education Fund; Peter Van Valkenburgh, director of research at Coin Center; and Mark Allen Hays, senior policy analyst at Americans for Financial Reform. Lawmakers will be in session until Sept. 27 when they will break for an election recess until Nov. 12. Tuesday’s hearing comes as Congress’s Sept. 30th deadline to pass a funding bill looms.

Amanda Tuminelli, the chief legal officer at DeFi Education Fund, said in her opening statement that traditional finance “relies on intermediaries that often serve as gatekeepers to finance.” “Big banks can and do deny access to the system for discriminatory reasons or no reasons. But DeFi is open access, anyone with an internet connection has access to a DeFi protocol and that is the epitome of financial inclusion,” she added.

In a separate filing late last week, the Blockchain Association and DeFi Education Fund told the Texas court the CAT would provide unprecedented insight into people’s blockchain transactions. Because the database connects personally identifying information with wallet addresses, anyone with access to the CAT could see all blockchain transactions a person makes, they said.

Crypto wasn’t mentioned in the regulations that set up the CAT. But the Blockchain Association and the DeFi Education Fund note that the commission under Gensler has moved (via enforcement cases and rulemakings) to categorize some market participants as brokers or dealers or exchanges. So it's not a leap to assume token transactions would need to be reported to the database. That, the trade groups’ brief argues, could include providing details that link wallet addresses to the names of their owners – a situation that would have massive privacy implications.

The Blockchain Association and the DeFi Education Fund say the U.S. Securities and Exchange Commission's newly operational database poses privacy concerns for millions and could loop in digital assets.

The DeFi Education Fund and the Blockchain Association jointly filed an amicus brief in a case brought by two individuals and the New Civil Liberties Alliance (NCLA) against the United States Securities and Exchange Commission (SEC), its chairman Gary Gensler and the Consolidated Audit Trail (CAT). The complaint does not mention cryptocurrency or blockchain, but the organizations argue that the CAT could have a profound negative effect on crypto users.

The Blockchain Association (BA) and its sister organization, the DeFi Education Fund (DEF), agree. The crypto lobbyist groups filed an amicus brief last week in support of class action defendants, furthering that Rule 613 has even more detrimental effects on the crypto industry.

The DeFi Education Fund said it purchased a patent from True Return Systems that will end litigation against MakerDAO and Compound Protocol. The patent in question is a “method and system for separating storage and process of a computerized ledger for improved function.” The patent was approved by the US Patent and Trademark Office back in 2018.

Cryptocurrency advocacy group the DeFi Education Fund on Monday announced it reached an agreement with a blockchain solutions firm it accused of "trolling" a pair of decentralized crypto protocols, purchasing the patent at issue and dedicating it to the public in return for a dismissal of the suits.

The DeFi Education Fund (DEF) on Monday reached an agreement with True Return Systems (TRS) to purchase a patent for oracle-like technology. The disputed patent was at the heart of two legal complaints against MakerDAO and Compound, a pair of decentralized finance protocols.

The patent wording itself is admittedly vague, something that the DeFi Education Fund was quick to point out when it filed an Inter Partes Review challenge with the USPTO.

The DeFi Education Fund (DEF) purchased a patent owned by True Return Systems (TRS) that was the basis of lawsuits against decentralized autonomous organizations MakerDAO and Compound Protocol for infringement.

Last Friday, blockchain tipsheet sat down with Amanda Tuminelli, Chief Legal Officer of decentralized finance advocacy firm DeFi Education Fund (DEF). We discussed both the latest and the “basics” in crypto mixing as well as the Department of Justice’s indictment in August 2023 of Tornado Cash software developers Roman Storm and Roman Seminov.

Amanda Tuminelli, chief legal officer at DEF, says in a statement to Law360 that the SEC's bid for dismissal focuses mostly on "procedural and jurisdictional arguments, and we look forward to refuting them."

The Supreme Court's decision gives the crypto industry an advantage, said Amanda Tuminelli, chief legal officer at the DeFi Education Fund. "This ruling means that executive agencies, like the SEC and CFTC, will need to be more cautious in extending their regulatory reach without clear statutory authorization, especially in novel and rapidly evolving fields like crypto and AI," Tuminelli said in an emailed statement to The Block.

“​​In the absence of specific legislation granting and clearly outlining regulatory authority over crypto, federal regulators are attempting to adapt their existing statutory authorities to cover crypto-related activities,” crypto advocacy group The DeFi Education Fund said Friday. “This approach is problematic because these authorities are ill-suited for the task, their application is unclear, and their authority is questionable.”

"We appreciate that candidates recognize the importance of not only debating how to regulate digital assets but also how to create responsible regulation that does not stifle innovation in the United States," said a spokesperson for the DeFi Education Fund.

DeFi Education Fund’s chief legal officer Amanda Tuminelli told Decrypt that Judge Shelby could have gone further by dismissing the case with prejudice. Still, she said the court would likely with DEBT Box if the case was retried. “The judge did impose an important condition on the SEC in his dismissal order: if the SEC chooses to bring this case against the same defendants again, they must do so before Judge Shelby,” Tuminelli explained. “And we know that Judge Shelby will not forget what happened the first time around.”

“We expect the Senate to continue working on and amending FIT21, and our focus will remain on ensuring that there are protections and legal certainty for developers and users of decentralized networks and protocols,” Miller Whitehouse-Levine, CEO of the DeFi Education Fund, said. “We look forward to working with the Senate on these core issues.”

Are gun manufacturers held liable for shootings? Is the U.S. government responsible if physical cash is used for crime? The double standard in Pertsev’s case is troubling. As the DeFi Education Fund put it in an amicus brief: “With no limiting principle in place, nearly all developers who create open-source software would be exposed to criminal liability for activity outside of their control years or decades later.”

A spokesperson from the DeFi Education Fund said they were disappointed in the outcome of Pertsev's case in the Netherlands but that it should have no impact on the U.S. case against Storm. "As we argued in our previously submitted amicus brief in the case against Roman Storm, the government's theory of liability in the indictment is unprecedented," a spokesperson for the fund said in an emailed statement. "According to the allegations in the indictment, software developers who create open source, general use software would be held criminally liable when third party bad actors use that software years after it was created and with no direct or active engagement between the developers and those bad actors." "This is simply not the law as it stands in the U.S.," they added.

“The government would be free to target software developers aligned with politically disfavored causes and industries, who would have little in the way of defence or recourse,” the DeFi Education Fund wrote in a legal brief it filed with the court to support Storm.

The three amicus briefs were filed by Coin Center, the Blockchain Association, and the DeFi Education Fund. The briefs, though written and filed separately, make largely similar arguments against the government's characterization of the case in its indictment.

In April 5 filings in U.S. District Court for the Southern District of New York, the Blockchain Association, Coin Center and DeFi Education Fund argued that Tornado Cash did not have control of the funds or messages users sent through the cryptocurrency mixer. The advocacy groups separately claimed that the three felony counts Roman faces should be dismissed, citing First Amendment issues regarding the Tornado Cash co-founder allegedly violating sanctions and the U.S. government “misunderstand[ing] the basic relationship between smart contract protocols and their developers” regarding allegations of money laundering.

The second suit came last month, when industry group the DeFi Education Fund joined with Beba LLC in a case against the SEC. Beba makes luggage and has airdropped digital tokens as part of a marketing strategy. It wants a ruling that the airdrops weren’t a securities transaction. DEF and Beba, which filed their lawsuit in the Western District of Texas, are also challenging the SEC’s “unwritten policy” on crypto rules as a violation of the Administrative Procedure Act, arguing the agency should’ve gone through a formal rulemaking.

Days after being hit with sanctions in a US district court, the Securities and Exchange Commission was served another lawsuit Monday, this time from co-defendants — the DeFi Education Fund and NFT issuer Beba.

The lawsuit's second claim, on which the decentralized finance advocacy group DeFi Education Fund is joining as co-plaintiff, asserts that the SEC adopted a new policy — without notice — since chairman Gary Gensler's 2021 appointment.

A crypto industry group and a West Texas apparel company are suing the Securities and Exchange Commission, arguing the agency’s “poorly conceived” crypto policy needs to go through rulemaking.

The DeFi Education Fund and apparel company Beba are suing the Securities and Exchange Commission, asking a Texas district court to declare that their $BEBA token airdrop is not a security and to enforce the Administrative Procedure Act on the SEC's rule-making process.

Waco-based brand Beba LLC and the DeFi Education Fund told a Texas federal court that the SEC "gets the law wrong" when it targets free distribution of crypto tokens, known as airdrops, as unregistered securities transactions. They're asking the court to declare that Beba's airdrop is on the right side of securities law and that the regulator can't broadly enforce its "new unwritten policy" that the bulk of digital asset transactions are securities. Read more at: https://www.law360.com/articles/1817238/crypto-group-apparel-co-sue-over-sec-crypto-policy?copied=1

There’s been a lot of litigation over Gary Gensler’s rules. But today, the SEC got hit with an unusual lawsuit – over regulations that it hasn’t issued and an enforcement action that it hasn’t brought. No surprise, it’s coming from the crypto industry. The case, filed in a Texas federal court by the DeFi Education Fund and a company called Beba, is pretty unique. It’s known as a pre-enforcement challenge, and the court is being asked to declare that a free token the apparel firm created to attract customers is not a security – and thus won’t set off an SEC probe.

Battered by a US crackdown, the crypto industry is tired of playing defence against the Securities and Exchange Commission. That’s why the DeFi Education Fund has been trying for months to find the perfect plaintiff with both the standing and backbone to take on Gary Gensler’s crypto-hostile agency.

On Monday, the DeFi Education Fund (DEF) filed a lawsuit in a Texas federal court against the SEC, arguing that Beba, a Texas-based apparel company, did not violate U.S. securities laws by airdropping its BEBA crypto token to customers for free.

The DeFi Education Fund teamed up with Beba Collection, a small apparel company, in a bid to get regulatory clarity from the courts on airdrops.

“I don't think anyone in the crypto industry is surprised that the SEC was so focused on its own advocacy that it lied to the court in order to bolster its position,” Amanda Tuminelli, Chief Legal Officer at DeFi Education Fund, told Decrypt. “My hope is that any judge with the SEC before them as a litigant will hold them to the highest standards and ensure the SEC supports their allegations with verifiable facts.”

Industry groups Blockchain Association and DeFi Education Fund made similar assertions in a joint brief on Thursday, telling the California court the Kraken suit is "yet another attempt by the SEC to sweep practically all digital assets within its regulatory purview" under its investment contract theory. The brief, penned by appellate heavyweight Paul Clement of Clement & Murphy PLLC, said the SEC has employed "constantly shifting theories" in its various crypto enforcement cases that have confused the industry and failed to establish where the agency believes its authority ends. "In short, none of the SEC's ever-evolving approaches can justify its ongoing efforts to expand its regulatory jurisdiction far beyond the bounds Congress imposed in the federal securities laws," the brief said.

Amanda Tuminelli, chief legal officer for crypto advocacy group the DeFi Education Fund, said in a statement to Law360 that the LEJILEX case sends a message to the SEC that industry participants intend to challenge the regulator on its crypto authority. "A ruling on the important questions raised by this suit would provide precedent for other federal courts to follow and would achieve a modicum of clarity for the sector in the United States," said Tuminelli. The DEF is not involved in the lawsuit.

The DeFi Education Fund (DEF), which also submitted a comment letter in 2022, said on Tuesday that the SEC’s new rule is “misguided and unworkable.” “While the SEC acknowledged receiving comments discussing DeFi, including our concerns, the SEC not only failed to confront the substance of our concerns but also failed altogether to articulate any discernible path to compliance for DeFi market participants,” DEF said. “Imposing obligations on entities in the DeFi ecosystem that cannot be complied with is wrong, impractical, and hostile to innovation.”

The DeFi Education Fund (DEF), which also submitted a comment letter in 2022, said on Tuesday that the SEC’s new rule is “misguided and unworkable.” “While the SEC acknowledged receiving comments discussing DeFi, including our concerns, the SEC not only failed to confront the substance of our concerns but also failed altogether to articulate any discernible path to compliance for DeFi market participants,” DEF said. “Imposing obligations on entities in the DeFi ecosystem that cannot be complied with is wrong, impractical, and hostile to innovation.”

The DeFi Education Fund was among crypto groups that objected to the original proposal. The group called Tuesday's final version "misguided and unworkable." "The SEC not only failed to confront the substance of our concerns but also failed altogether to articulate any discernible path to compliance for DeFi market participants," the organization said in a statement. "Imposing obligations on entities in the DeFi ecosystem that cannot be complied with is wrong, impractical, and hostile to innovation."

The DeFi Education Fund called the adopted rulemaking on Tuesday "misguided and unworkable." "While the SEC acknowledged receiving comments discussing DeFi, including our concerns, the SEC not only failed to confront the substance of our concerns but also failed altogether to articulate any discernible path to compliance for DeFi market participants," CEO Miller Whitehouse-Levine said in an emailed statement. "Imposing obligations on entities in the DeFi ecosystem that cannot be complied with is wrong, impractical, and hostile to innovation."

“The breadth and ambiguity of the proposal’s qualitative standards would raise many questions about the status of investors who use AMMs, other DeFi protocols, and other all-to-all execution protocols,” DeFi Education Fund CEO Miller Whitehouse Levine wrote in a letter.

For example, "everyday economic activity" like liquidity pools or swaps might be captured in the part of the proposal that addresses users exchanging different types of digital assets, a letter from the DeFi Education Fund said.

Further, in a memo she wrote when dismissing a lawsuit against Uniswap founder Hayden Adams, Failla distinguished between decentralized apps, protocols and tokens, in an “indication of how careful she will be here,” Chief Legal Officer at the DeFi Education Fund Amanda Tuminelli said.

A spokesperson from the DeFi Education Fund (DEF), a DeFi-focused research and advocacy group, told The Defiant the hearing was “a step forward.” Judge Failla called the group’s amicus brief, which the DEF filed in August, “really fine” for explaining what crypto wallets and staking really are. “That actually, in some respects, makes more sense to me than the [SEC’s] description of it in the complaint,” Failla said. “On wallets and staking, the court rightly noted the paucity of factual allegations in the SEC’s complaint, and we were happy to hear that our amicus brief on these issues was useful in the court’s understanding of them,” the spokesperson said.

“This is the most important case in decades for commerce in this country, the relationship between business and the government, and the relative balance of the legislative and executive branches,” Miller Whitehouse Levine, CEO of DeFi Education Fund, told DL News.

After years of ambiguity, 2024 and the years to follow look likely to cement the U.S. government’s relationship to digital assets. The stakes are high: Should the Biden administration get its way, DeFi might soon be effectively outlawed in America, the DeFi Education Fund’s Miller Whitehouse-Levine previously told Decrypt.

“Regulatory agencies — the CFPB included — are trying to grab jurisdiction in a way that creates statutory contradictions,” Miller Whitehouse-Levine, CEO of the DeFi Education Fund, told DL News.

“At the moment, it is literally not possible to comply with the reporting requirement,” Miller Whitehouse-Levine, CEO at the DeFi Education Fund, told Cointelegraph. What’s needed instead for the 60 million Americans who own digital assets today are “fit-for-purpose tax provisions” that basically regard crypto as a different sort of case.

The challenge has been led by the DeFi Education Fund, a crypto advocacy group that says that the technology the patent covers predates the patent itself and has called True Return Systems a "patent troll" that threatens to force anyone using oracle systems to pay. On the same day in 2022, True Return Systems brought two suits against what amount to technology programs, arguing that they were infringing on the True Return Systems patent.

“I think it's quite clear that it applies to pretty much any transaction in which someone is, in exchange for a good or service, receiving over $10,000 worth of crypto assets,” Miller Whitehouse-Levine, CEO of the crypto lobbying group DeFi Education Fund, told Decrypt.

For years, sporadic enforcement actions and dragged-out lawsuits have defined the American government’s relationship to the crypto sector. According to Miller Whitehouse-Levine, CEO of crypto lobbying group DeFi Education Fund, 2024 looks poised to finally bring some much-craved certainty to U.S. crypto regulation—for better or worse.