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DeFi Education Fund

@fund-defi

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DeFi Education Fund pfp
DeFi Education Fund
@fund-defi
"The passage of GENIUS out of the Senate represents a massively positive shift for DeFi regulation in the United States, particularly in that a broad, bipartisan group of lawmakers have recognized the nuanced technological realities of DeFi technology." Read the full blog 👇 https://www.defieducationfund.org/post/u-s-senate-passes-genius-act
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DeFi Education Fund
@fund-defi
Yesterday, the U.S. Senate passed the GENIUS Act with a bipartisan supermajority. TODAY, DEF published a blog post examining what's in the bill that just passed, what it means for DeFi, and what's next. As we write: "GENIUS is significant for DeFi in that it recognizes decentralized blockchain networks as base layer infrastructure in a dollar-backed global financial system, protects peer-to-peer transactions in stablecoins, and explicitly treats DeFi differently than centralized intermediaries..."
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DeFi Education Fund
@fund-defi
To read the full brief, please click the link below: https://www.defieducationfund.org/_files/ugd/84ba66_7fd6c3ef908341d9b7e335bc263e0dcb.pdf
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DeFi Education Fund
@fund-defi
Simply, the keystone of decentralized finance is disintermediation—and DeFi could have tremendous societal and individual benefits with the appropriate regulatory frameworks.
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DeFi Education Fund
@fund-defi
As DeFi experts, we spend a majority of the submission focusing on the tech at hand. In section I, we provide an overview of the Ethereum network, getting into the details of smart contracts, what it means to be immutable, and its relation to DeFi. In section II, we get into privacy-preserving technology, including zero knowledge (“zK”) cryptography, why it is important, and why it should always be properly categorized as a neutral tool.
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DeFi Education Fund
@fund-defi
And, in section III, we discuss how Tornado Cash works, how users are able to create private transactions, and conclude that Tornado Cash is not a “service” nor obligated entity of any kind.
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DeFi Education Fund
@fund-defi
We elaborate on the potential unintended consequences of software developers being held liable for third-party misconduct.
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DeFi Education Fund
@fund-defi
Like the case against Roman Storm in the U.S., the case against Pertsev presents the same novel question: “when should software developers be held criminally liable for the actions of third parties who use their software
”?
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DeFi Education Fund
@fund-defi
It is not normal for designers, inventors & software developers to be liable for “third-party misuse” of their technology. “For example, automobile manufacturers are not liable for drivers who use their vehicles as weapons; construction companies are not liable for businesses that use their offices to perpetrate fraud; and television manufacturers are not liable for newscasters who use their screens to publish false or defamatory statements.”
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DeFi Education Fund
@fund-defi
Today, DEF & Coin Center are happy to submit an expert opinion to the Dutch court handling Alexey Pertsev’s appeal as he undergoes trial in the Netherlands. The brief addresses key technological aspects of the Tornado Cash Protocol as well as privacy-related tools within DeFi. đŸ§”
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DeFi Education Fund
@fund-defi
In our submission, we provide “detailed analysis and insights” on the following key areas of DeFi: - Neutrality of Technologies - Privacy Benefits for Users - Societal & Financial Benefits of DeFi Protocols - Compliance & Regulatory Frameworks
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DeFi Education Fund
@fund-defi
Our previous analysis of the government’s allegations in the Samourai indictment is available below, too. 👇 https://www.defieducationfund.org/_files/ugd/84ba66_87dfb370e81a4766811bf16e5293c6da.pdf
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DeFi Education Fund
@fund-defi
We also explain that the government’s underlying legal theory will chill innovation & stifle the lawful development of non-custodial software tools.
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DeFi Education Fund
@fund-defi
Ultimately, we conclude that the rule of lenity and the major questions doctrine should lead to the dismissal of Count II. We are thankful to our partners at BA, and appreciate the extremely talented team at Consovoy McCarthy for their support. You can read the full amicus brief at the link below 👇 https://www.defieducationfund.org/_files/ugd/84ba66_4583bdbba0d944b4a6ad99e21edea16e.pdf
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DeFi Education Fund
@fund-defi
We then explain that Count II violates due process and fair notice because the defendants relied on FinCEN’s 2019 guidance in good faith, which clearly states that non-custodial software providers are *not* money transmitters because they do not control user funds. The DOJ ignored this Guidance without notice or a reasoned explanation.
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DeFi Education Fund
@fund-defi
Simply: “Providing the technology for a person to make their own transfer, without controlling the funds at issue, is not making that transfer ‘on behalf of’ someone else.”
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DeFi Education Fund
@fund-defi
To start, we argue that Count II is inconsistent with the statutory text. Why? The plain meaning of the statutory language: “Under the ordinary, common-sense understanding of §1960(b)(2), a defendant cannot ‘transfer’ funds ‘on behalf of’ another person if he does not have possession and control over the funds to begin with. Someone does not ‘transfer,’ ‘transmit,’ or ‘accept’ an object when he creates a neutral tool that other people use to move the object.”
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DeFi Education Fund
@fund-defi
Our brief focuses on why Count II—the allegation that Rodriguez & Hill conspired to operate an unlicensed money transmitting business—should be dismissed. As DEF has outlined previously, the government’s interpretation of 18 U.S.C. §1960(b)(2) is *fatally* flawed because software devs who NEVER custodied nor exercised control of any third party funds are not operating a money transmitting business.
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DeFi Education Fund
@fund-defi
[NEW] Today, DeFi Education Fund & @blockchainassn published an amicus brief in the Samourai Wallet case in support of Keonne Rodriguez and William Lonergan Hill’s motion to dismiss the indictment. Though the Judge denied the motion allowing amicus briefs in Samourai, we felt it important to share our perspective đŸ§”đŸ‘‡
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DeFi Education Fund
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end/ To read the full statement, click the link below: https://www.defieducationfund.org/post/joint-statement-from-crypto-policy-organizations-on-blockchain-regulatory-certainty-act
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