DeFi Education Fund

@fund-defi

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DeFi Education Fund

You can read our submission here: https://www.defieducationfund.org/_files/ugd/84ba66_0114836a70d042b893f09c731352a775.pdf

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DeFi Education Fund

We are very grateful to our partners at Uniswap Foundation for their collaborative efforts on this submission as well as the brilliant team at Morrison Cohen LLP for their guidance and assistance in drafting this submission.

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DeFi Education Fund

Last, we respectfully urge the SEC to implement the following principles via guidance or a staff statement: 👉 The Commission should treat DAOs with decentralized control over governance of the network as nothing more than disparate and dispersed groups of people, unless facts are developed that indicate otherwise; 👉 The Commission should recognize that DAOs with decentralized control over the governance of the network are not an identifiable and coordinated group of “others” undertaking efforts for the purposes of the “efforts of others” prong of a Howey analysis; and 👉 The Commission should recognize that blockchain records are a uniquely transparent and immutable resource that eliminate informational asymmetries.

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DeFi Education Fund

We then argue that when analyzing decentralization of a network under the securities laws, the SEC should: ➡️ focus on “the existence of dispersed control over the governance of a network or protocol, rather than the ongoing efforts of developers or other identifiable groups as ‘active participants,’” and ➡️ recognize that “ongoing efforts to maintain or develop a system without centralized control do not create information asymmetries and trust dependencies that would normally implicate the need for disclosure and regulation under the securities laws.”

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DeFi Education Fund

We note: “The lack of clarity from the Commission’s prior statements and DAO-related enforcement activity has left the public without meaningful guidance. This lacuna raises concerns about the treatment of DAOs going forward, including in areas addressed by Commissioner Peirce relating to the criteria used to evaluate decentralized networks as relevant to the federal securities laws.”

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DeFi Education Fund

1️⃣ First, we provide an overview of DAOs & Network Tokens, and discuss smart-contract based governance. 2️⃣ Then, we get into prior SEC actions and pronouncements concerning DAOs, and explain why further guidance related to DAOs and decentralization is of the utmost importance.

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DeFi Education Fund

Specifically, we present two main theses for consideration of the SEC Task Force:

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DeFi Education Fund

🚨The DeFi Education Fund and Uniswap Foundation provided a submission to the SEC Crypto Task Force focused exclusively on DAOs. What’s the TLDR? See the 🧵 👇

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DeFi Education Fund

For context, our submission is in response to Commissioner Hester Peirce’s Feb 21, 2025 Statement: “There Must Be Some Way Out Of Here.” While the statement does not specifically mention DAOs, Commissioner Peirce *did* ask for comments on matters that are critical to DAOs, like governance and dispersion of control.

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DeFi Education Fund

end/ For more information about what the BRCA does, please check out this helpful one-pager from DEF 👇 https://www.defieducationfund.org/_files/ugd/84ba66_ad055bc0bfb54818ac482371cfe0071e.pdf

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DeFi Education Fund

2/ Why is the BRCA needed? Despite Congress’ intent to apply the BSA’s requirements only to intermediaries such as financial institutions or businesses that take control of customer funds, software developers have been accused of running unlicensed MTBs even when they only create software that enables p2p financial transactions. The BRCA makes clear: that’s not the law.

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DeFi Education Fund

1/ DEF proudly supports Rep. Tom Emmer & Rep. Ritchie Torres in re-introducing the Blockchain Regulatory Clarity Act today (BRCA). The BRCA is bipartisan legislation that would protect developers of non-custodial peer-to-peer software protocols with no control over user assets from being incorrectly defined as operators of money transmitting businesses (MTBs).

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DeFi Education Fund

3/ For an analysis of the charges in this case related to money transmission, check out DEF’s recent paper on the matter: https://www.defieducationfund.org/post/def-authors-new-paper-exploring-samourai-wallet-money-transmitters

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DeFi Education Fund

Notable update in the Samourai Wallet Case: Today, devs’ lawyers revealed that despite being *explicitly* told by FinCEN that non-custodial software such as Samourai Wallet is most likely not a money transmitter, DOJ prosecuted the devs anyway…

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DeFi Education Fund

2/ The letter makes clear that on August 23, 2023 - 6 months before the indictment - prosecutors knew FinCEN’s view: “under FinCEN’s guidance, the fact that Samourai Wallet did not take custody of cryptocurrency would “strongly suggest” that they were not a money transmitter.”

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DeFi Education Fund

Do you care about privacy? Do you care about keeping America as the hub for innovation? If you said yes to either, *SIGN* our petition calling for dismissal of the case against software developer Roman Storm.

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DeFi Education Fund

If you care about ENDING the lawless prosecution of software developers in the U.S., and dismissing the case against Roman Storm, please sign our petition👇 Protect developers. Protect innovation. Protect DeFi. Protect America's leadership in tech.

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DeFi Education Fund

If you care about ENDING the lawless prosecution of software developers in the U.S., and dismissing the case against Roman Storm, please sign our petition👇 Protect developers. Protect innovation. Protect DeFi. Protect America's leadership in tech.

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DeFi Education Fund

5/ President Trump has called for America to be the "crypto capital of the planet." If we want that vision to become a reality, we must protect software developers and DeFi builders.

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DeFi Education Fund

6/ We hope you will join us in elevating the importance of this issue and in urging the Trump administration to act expeditiously by *ENDORSING* this petition at the link below. How? You can sign via X or with your wallet for stronger, on-chain validation. 👇 https://section1960.defieducationfund.org/

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