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DEF’s April Recap
Here’s what the DeFi Education Fund (DEF) has been up to in April 2024. If you have any questions or would like to learn more about a specific activity, please do not hesitate to reach out at contact@defieducationfund.org.
Amicus Brief in U.S. v. Storm
On April 5, DEF submitted an amicus brief in support of Roman Storm’s Motion to Dismiss the Indictment against him from the U.S. Department of Justice (DOJ).
DEF’s position in the brief is relatively simple: the DOJ’s novel theories are unprecedented and not supported by allegations that reflect the reality of the technology.
For the brief, we conducted extensive research of prior International Emergency Economic Powers Act (IEEPA) conspiracy cases which showed that in none of the previous cases did the government allege that the defendant was responsible for violating IEEPA because they created some tool or technology and later became aware that it was used by a sanctioned entity.
For this brief, we worked together with our colleagues at the Blockchain Association and Coin Center to ensure that the industry addressed all allegations in the Indictment, and we encourage you to read their amicus briefs as well.
Be sure to check out the full brief as well as our CLO’s thread on the matter.
Examining the Reality of Hamas’ Funding
In early April, Adewale Adeyemo, Deputy Secretary of the Department of Treasury, testified before the Senate Committee on Banking, Housing, and Urban Affairs, focusing on the Treasury’s efforts to counter illicit finance, terrorism, and sanctions evasion and the role that crypto plays.
Although the hearing touched on a variety of national security matters, one recurring topic of Deputy Secretary Adeyemo’s remarks was Hamas’ use of cryptocurrency.
In a blog post after the hearing, we countered this narrative and demonstrated how traditional financial products still play a larger role in funding terrorist activities despite the primary focus on crypto.
As we write, “the Treasury Department has for years found that cryptocurrency is not the primary method through which Hamas or other terrorist groups move their money and that terrorists continue to prefer traditional products and services to finance their operations. Exclusively focusing on crypto means deprioritizing terrorists’ preferred financing sources, which might be where to start.”
Be sure to read the full blog post here.
Updates on Crypto Legal Battles
In April, DEF’s CLO, Amanda Tuminelli, went on a full-court press, talking to various reporters and podcasts, and penning op-eds about the state of legal affairs concerning crypto and DeFi in the United States.
Appearing on Bankless with DEF Board Member, Jake Chervinsky, Amanda discussed DEF’s suit against the SEC, her thoughts on Judge Failla’s ruling in SEC v. Coinbase, and the case against Roman Storm among other relevant topics.
Amanda also penned an op-ed in Unchained focusing on the differing conclusions that the SEC, CFTC, and DOJ have come to about MNGO and how that has “exacted a real cost on the growth of the U.S. crypto industry.”
Be sure to check out all of Amanda’s media appearances from April at the links below.
Media
Blog Post
Podcasts
Law of Code: Pre-enforcement lawsuit against the SEC with Amanda Tuminelli and Jake Chervinsky
Unchained Podcast: Gary Gensler’s Case Against Uniswap: Does the SEC Even Stand a Chance?
Bankless Podcast: Crypto vs. The World | Jake Chervinsky & Amanda Tuminelli
Law of Code: Liability on smart contract developers: Roman Storm case with Jake Chervinsky and Amanda Tuminelli
Thinking Crypto: Will Crypto Have to go to the Supreme Court for Clarity?
Op-Eds
Authored by Amanda Tuminelli
Print/Online
DL News: Second Tornado Cash defendant wins allies as Alexey Pertsev awaits verdict
“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 Block: Three crypto advocacy groups file amicus briefs in Tornado Cash developer Roman Storm's case
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.
Cointelegraph: Advocacy groups warn of ‘adverse repercussions’ for crypto in case against Tornado Cash co-founder
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.
Bloomberg Law: Crypto Firms Take SEC Fight to Texas, With Eye on Supreme Court
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.
For up-to-date information about what’s happening in D.C. and what we are up to, please follow us on Twitter @fund_defi and subscribe to our Substack.
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