On August 21, 2026, the Crypto Council for Innovation (“CCI”) and the Blockchain Association (“BA”) filed a lawsuit challenging the Illinois Digital Asset Tax Act. Effective January 1, 2027, the Act will impose a 0.2 percent tax on the value of digital assets involved in exchange, transfer, or storage activities, including transfers that have no sale, no gain, and no change in ownership (e.g., moving digital assets between a user’s own wallets or accounts). The complaint argues that Illinois unlawfully singles out digital asset activity, as comparable traditional financial transactions generally are not subject to an equivalent tax.

CCI and BA allege the Act violates the federal Internet Tax Freedom Act (“ITFA”), the dormant Commerce Clause, the Illinois and federal Due Process Clauses, and the Illinois Constitution’s Uniformity Clause. They also raised concerns about the Act’s legislative process, noting that it was added to a 1,500+ page bill on the final day of the Illinois legislative session and passed through both chambers within roughly 24 hours, with limited public comment or debate. The lawsuit asks the court to declare the Act unlawful and seeks an injunction to prevent Illinois officials from implementing or enforcing it.

The challenge is another example of the growing tension between state-level digital asset regulation and the need for a coherent national framework.

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DEF Board Members Co-Author Practical Guide for Financial Institutions and Permissionless Networks

On August 24, 2026, DEF board member Rebecca Rettig (Chief Operating Officer and Chief Legal Officer at Jito Labs), Columbia Business School Adjunct Professor Omid Malekan, and DeFi Education Foundation board member Michael Mosier (Co-Founder of Arktouros PLLC) published a new paper titled “The Compatibility of Permissionless Networks and Financial Integrity: A Practical Guide for Financial Institutions.” The authors argue that financial integrity laws—including the Bank Secrecy Act, anti-money laundering, and countering the financing of terrorism requirements—and U.S. sanctions laws do not prohibit banks and other financial institutions from using open, permissionless blockchains. Instead, the paper explains that permissionless networks can fully satisfy these requirements if institutions implement controls at the application layer, consistent with the financial sector’s adoption of the internet, where compliance and oversight are applied to activities institutions directly control.

The paper also addresses several common concerns about exposure to illicit actors at the network layer and the provenance of assets, explaining that institutions do not automatically “inherit” sanctions exposure from an asset’s prior interactions. Institutions can instead manage direct exposure through tools such as blockchain analytics, wallet screening, transaction monitoring, and reporting. The paper further considers the confidentiality of onchain data and balancing privacy with compliance.

You can read the paper here.

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Treasury Launches Financial Sector Quantum-Readiness Task Force

On August 24, 2026, Treasury announced a new Quantum-Readiness Task Force, following President Trump’s Executive Order 14412, to accelerate the financial sector’s transition to quantum-resistent cryptography. Building on the G7 Cyber Expert Group’s roadmap for transitioning to post-quantum cryptography, the Task Force will bring together government, financial institutions, financial market infrastructures, technology providers, and other private-sector leaders to focus on three workstreams: Sector Alignment & Post-Quantum Cryptography, Third-Party & Vendor Readiness, and Digital Assets & Emerging Technology Risk.

The initiative is relevant for DeFi wallets, blockchain transactions, smart contracts, and other protocol infrastructure that rely heavily on cryptographic systems. Treasury’s explicit focus on digital assets underscores the importance of ensuring that onchain infrastructure can adapt to evolving cryptographic standards while maintaining interoperability and operational resilience.

You can read the press release announcing the task force here.

Notable and Quotable

“Financial institutions can use permissionless networks; concerns about financial integrity laws should not deter them and can be addressed under existing law through a risk-based compliance framework that places controls at the app layer.”

— DEF Board Member and Chief Operating Officer and Chief Legal Officer at Jito Labs Rebecca Rettig announcing a new paper “The Compatibility of Financial Integrity with Permissionless Networks: A Practical Guide for Financial Institutions.”

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On August 18, 2026, the SEC proposed Regulation Crypto Assets, a new framework tailored to investment contracts involving crypto assets. The proposed rule would create two new pathways for crypto projects to raise capital without registering under the Securities Act.

For DeFi, the most consequential section of the proposed rule is Rule 400: the Investment Contract Safe Harbor. Rule 400 would provide projects a clearer pathway for determining when a crypto asset is no longer part of the investment contract in which it was originally offered or sold.

You can read the SEC’s proposed framework here.

Treasury Issues NPRM Implementing Section 3 of the GENIUS Act

On August 17, 2026, Treasury issued a Notice of Proposed Rulemaking implementing Section 3 of the GENIUS Act, which governs the issuance, offer, and sale of payment stablecoins in the United States. Beginning July 18, 2028, digital asset service providers will generally be prohibited from offering or selling payment stablecoins to U.S. persons unless they are issued by a permitted U.S. issuer or are a qualified foreign issuer that satisfies applicable U.S. requirements, which includes having the technical capacity and intent to comply with U.S. law.

Importantly for DeFi, the GENIUS Act excludes certain technology including self-custodial software, validators, and liquidity-pool activity from the definition of “digital asset service provider,” leaving significant categories of non-intermediated activity outside of these restrictions. Comments on Treasury’s proposed rule are due on October 19, 2026.

You can read the NPRM here.

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President Trump Pushes the Clarity Act at White House Crypto Summit

On August 19, 2026, President Trump hosted crypto executives, traditional finance leaders, and federal regulators at the White House ahead of the CFTC’s Innovation Advisory Committee meeting. Trump called on Congress to pass “a fair version of the Clarity Act,” which he framed as the next major step for U.S. crypto policy.

SEC Chairman Paul Atkins echoed this message, calling the passage of the Clarity Act the “most important priority,” and highlighting the SEC’s newly proposed Regulation Crypto Assets. CFTC Chairman Michael Selig said his agency would “use every tool available” to advance regulatory clarity while Congress works on legislation.

You can watch the full meeting here.

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CFTC Innovation Advisory Committee Discusses Crypto, AI, and Prediction Markets

On August 20, 2026, the CFTC’s Innovation Advisory Committee held its inaugural meeting, which included sessions on crypto assets, artificial intelligence, and prediction markets. The crypto discussion centered on how overlapping federal jurisdiction, state-by-state licensing, shifting legal interpretations, and ‘regulation by enforcement’ have increased legal and compliance costs, limited product availability across states, discouraged startups and investment, and pushed hiring and trading activity offshore.

Professor Carla Reyes of SMU Law highlighted the need for clear rules governing developers of financial protocols, pointing to the CFTC’s prior enforcement actions as creating uncertainty for developers seeking to build products within the agency’s jurisdiction. She also pointed to the Blockchain Regulatory Certainty Act (BRCA) as an important step toward providing protections for developers. More broadly, participants called for clear federal rules through the Clarity Act, as well as proactive agency rulemaking regarding the treatment of perpetual futures, tokenized collateral, and 24/7 markets.

The AI session of the meeting focused on agentic finance and autonomous systems, with discussion of cybersecurity, accountability, formal verification of financial software, stablecoins as potential payment rails for AI agents, and new derivatives and price-discovery markets.

The final session on prediction markets examined the growing federal-state jurisdictional conflict over event contracts and their potential value for hedging and price discovery, while also raising questions about manipulable contracts, retail protections, consistent KYC requirements, and the boundary between CFTC-regulated event contracts and securities.

You can watch the full meeting here and read Chairman Selig’s remarks here.

DEF & SPI Respond to FinCEN’s GENIUS Act CIP NPRM

On August 21, 2026, DEF and Solana Policy Institute (SPI) submitted a comment letter responding to FinCEN and the federal banking agencies’ joint proposed rule implementing customer identification requirements for permitted payment stablecoin issuers (PPSIs) under the GENIUS Act.

DEF and SPI generally support FinCEN’s focus on direct relationships between stablecoin issuers and their customers, but urge the agencies to ensure the final rule does not expand those obligations to secondary-market activity or decentralized infrastructure.

You can read our blog post on the submission here.

Notable and Quotable

“This is common-sense regulation: minimum effective dose, maximum freedom to build, and durable clarity under existing law. […] We are charting a road to bring innovators back to the United States.”

— Chairman Paul Atkins, in a statement on the SEC’s proposed Regulation Crypto Assets

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On August 8, 2026, Senate Majority Leader John Thune filed cloture on the motion to proceed with the Digital Asset Market Clarity Act, preserving a path for Senate consideration when lawmakers return from August recess. Invoking cloture requires 60 votes but is not the final vote for passing the bill.

The cloture motion is set to ripen on September 15, giving senators additional time to resolve remaining negotiations. Although the timing does not guarantee a vote that day, the filing provides a procedural path for the Senate to take up the legislation after recess.

As DEF’s Vice President of Government Relations Talia Davis told The Block: “At least there is acknowledgement that this will happen, or at least some hope that it will happen in September. I think some people in the industry are still very skeptical if that will actually follow through,” while noting that the bill remains a priority for the Senate.

For DeFi, these negotiations remain especially important. The bill includes key protections for noncustodial developers and blockchain infrastructure, especially under the Blockchain Regulatory Certainty Act (BRCA), and many policymakers and industry participants, including DEF, will be working hard to ensure the protections remain intact as the legislation advances.

White House Expands Cyber Tools to Target “Transnational Cyber-Enbaled Crime”

On August 12, 2026, President Trump signed a National Security Presidential Memorandum directing federal law enforcement to expand the use of cyber tools against transnational criminal organizations targeting Americans. The initiative will also allow vetted private-sector companies to support government-directed cyber operations targeting foreign cybercrime networks.

While the action is not only limited to crypto, Patrick Witt, Executive Director of the President’s Council of Advisors for Digital Assets, noted it is a “major step toward shutting down the scammers who exploit crypto to prey on Americans.”

You can find a fact sheet about the memorandum here.

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CFTC Chairman Selig Discusses American Leadership in Innovation

On August 6, 2026, CFTC Chairman Michael Selig published an op-ed in the Economist encouraging greater innovation in US and global derivatives markets. The op-ed emphasized the importance of international cooperation, but reminded global regulators that “America is not in the business of importing regulatory trends designed by agencies that are considering yesterday’s markets built around limited trading hours, single exchanges and screen-based trading.” Chairman Selig applauded advances in American financial regulation, including the CFTC’s approval of the first-ever Bitcoin perpetual futures contract and the expansion of trading hours for certain contracts.

You can read the full article here.

Notable and Quotable

“Section 604…will ensure that the people designing agentic finance, tokenized markets, and the rails underneath them keep doing that work here, under clear law. Other jurisdictions are courting exactly this talent and capital. [...] Even the most forward-leaning regulator is telling us that Congress sets the durable answers, and that protecting developers belongs at the center of the analysis.”

—Joseph Chalom, CEO of Sharplink and Former Head of Digital Assets Strategy at BlackRock

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On July 22, 2026, the Senate released an updated draft of the Clarity Act. Since then, companies and industry groups have voiced support for the legislation, urging the Senate to advance the bill to the floor and ultimately pass the Clarity Act.

Supporters include traditional financial institutions, technology companies, and crypto industry organizations such as Fidelity, Blackrock, Goldman Sachs, Block, Franklin Templeton, DCG, and Solana Policy Institute. Trade associations backing the legislation include the Consumer Technology Association, the National Black Church Initiative, and the three major crypto industry trades — Blockchain Association, Crypto Council for Innovation, and the Digital Chamber.

As mentioned in previous newsletters, the Clarity Act has also received support from law enforcement organizations, including the Fraternal Order of Police, the National Organization of Black Law Enforcement Executives, and most recently, the Major Cities Chiefs Association.

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New Clarity Act Advocacy Tool

The Blockchain Association has launched “Clarity for America,” a new tool that enables constituents and organizations to draft letters to Senate leadership urging a floor vote on the Clarity Act. The tool uses AI to generate personalized letters for those interested in supporting the legislation.

You can explore the tool and generate a letter to Senate leadership here.

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Notable Quotable

“I can guarantee you one thing: the best way to lose the future is to lose control over science and technology, and the best way to do that is to force our builders offshore.”

—Greg Xethalis, General Counsel at Multicoin Capital and DEF Board Member on the Empire podcast

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On July 22, 2026, the Senate released a new draft of the Clarity Act, harmonizing proposed text from the Senate Banking and Agriculture Committees. While the revised text reflects significant compromises made throughout the legislative process, it preserves critical developer protections and further bolsters the bill’s law enforcement provisions.

The bill leaves developer protections unchanged, including:

• Section 10604, which retains the Blockchain Regulatory Certainty Act (BRCA) and prevents non-controlling, non-custodial developers from being improperly classified as money transmitters under the Bank Secrecy Act;

• Section 10601, which maintains critical developer protections under the Securities Exchange Act;

• Section 10605, the Keep Your Coins Act, which protects everyday Americans’ right to self-custody their digital assets; and

• Section 20209, which maintains critical developer protections under the Commodity Exchange Act.

The bill also includes a new Title IX, “Law Enforcement Tools,” which provides resources to law enforcement. The new title supplements the legislation’s illicit finance provisions in Title II, “Protecting Against Illicit Finance,” and Title III, “Responsible Innovation in Decentralized Finance.” At first glance, Title IX appears to be smart regulation that will provide law enforcement with appropriate tools without overregulating software developers. In total, the Clarity Act includes 25 sections related to sanctions and AML, following calls from law enforcement groups to strengthen the illicit finance provisions.

Next up? The Senate is expected to consider a few procedural motions before holding a final vote on the legislation. The DEF team will track amendments that affect DeFi and share updates accordingly.

You can read DEF’s full analysis of the bill text here.

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SEC Commissioner Pierce Speaks About Crypto Vaults and Lending Strategies

On July 22, 2026, SEC Commissioner Hester Peirce published a statement entitled “Headstands and Summervaults: A Statement on Crypto Vaults and Lending Strategies.” The statement acknowledges the breadth of crypto vault and lending strategies currently available onchain, while cautioning that certain activities involving those tools may trigger federal securities laws. Crypto vaults are smart contracts that allocate funds across staking and lending protocols to generate yield, while lending strategies include decentralized or centralized platforms where users can lend assets in return for rewards.

Commissioner Pierce explained that, depending on how they are structured, vaults that “hold or allocate assets to securities could fall into investment company territory.” On lending, Commissioner Pierce warned that involvement in managing lending strategies may trigger “investment adviser issues.”

“As securities move onchain, vaults and onchain lending strategies may become mainstream tools for managing investment portfolios. The promise will only be realized, however, if we grapple now with the intersection between these asset deployment tools and the federal securities laws.”

You can read the full statement here.

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The National Fraternal Order of Police Endorses Clarity Act

On July 24, 2026, The National Fraternal Order of Police submitted a letter to the Senate Banking Committee endorsing the Clarity Act.

“We believe the provisions outlined above represent a meaningful effort to provide law enforcement with stronger investigative tools, clearer compliance pathways, and improved coordination mechanisms to address these threats while protecting consumers and victims. Accordingly, the FOP’s initial concerns have been satisfactorily addressed and we look forward to working with you to get the amended bill passed,” said National President Patrick Yoes.

The DEF team reacted to the letter with a celebratory statement on X here.

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Notable Quotable:

“Lummis has delivered law enforcement what we have never had in this space: clear jurisdiction, mandatory cooperation, actionable intelligence, and the legal framework to prosecute. For years, bad actors have exploited the ambiguity that congressional inaction left in place. This bill replaces this murkiness with specific, enforceable obligations that apply to everyone operating in this market.”

—Austin Knudsen, Attorney General of Montana writing for The Hill (full article here)

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On July 1, 2026, software developer Michael Lewellen filed an appeal in the Fifth Circuit, advancing his preenforcement challenge seeking declaratory judgement that his permissionless, decentralized crowdfunding software is not an unlicensed money transmitter under the Bank Secrecy Act. The district court dismissed the case for lack of standing, and Lewellen is now asking the Fifth Circuit to reverse that decision. In his appeal, Lewellen argues that the district court judge improperly disregarded evidence of a credible threat of prosecution facing non-custodial software developers, pointing to the prosecutions of the Tornado Cash and Samourai Wallet developers.

On July 8, 2026, Paradigm filed an amicus brief in support of Lewellen, arguing that the DOJ has chilled innovation by advancing an erroneous interpretation of 18 U.S.C. § 1960 in prosecutions of developers of non-custodial software that enables users-controlled transactions.

You can learn more about the case here. And, you can read Lewellen’s Fifth Circuit brief and Paradigm’s amicus brief here and here, respectively.

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House Holds Hearing on How the CLARITY Act Unlocks Innovation

The House Financial Services Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence held a hearing in New York titled “Building the Future of Finance: How the CLARITY Act Unlocks Innovation.” The hearing focused on how passage of the CLARITY Act could support digital asset innovation by providing regulatory certainty, encouraging the growth of digital asset activity in the U.S., and establishing a more coordinated framework between the SEC and CFTC. Lawmakers highlighted the legislation’s progress and expressed support for advancing the bill, noting its importance to maintaining U.S. leadership in the global economy.

You can watch the full hearing here.

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FCA Overview of Cryptoasset Regime and Upcoming DeFi Guidance

On June 30, 2026, the UK’s Financial Conduct Authority (FCA) issued guidance related to its “cryptoasset” regulatory regime. The guidance applies to all firms issuing regulated cryptoassets or providing cryptoasset services in the UK and addresses disclosure requirements, market abuse, stablecoin issuance, regulated cryptoasset regimes, prudential requirements, and the application of the FCA handbook to cryptoasset activities.

Policy Statement PS26/11, Regulated Cryptoasset Activities, includes a section addressing DeFi and explains that FCA rules and guidance apply where “a clear controlling person undertakes cryptoasset activities.” The FCA will assess on a case-by-case basis whether a person falls within the scope of regulated activity, leaving DeFi participants with a UK presence in a continued state of regulatory uncertainty. The FCA committed to issuing another consultation paper later this year on “indicators of (de)centralisation,” promoting operational resilience, and mitigating financial crime risks.

This new guidance follows Consultation Paper CP25/40, published in December 2025, in which the FCA sought feedback on its DeFi-related policy proposals. In February of 2026, DEF submitted a comment letter urging the FCA to take a control-based approach to regulating DeFi. Responding to comments on CP25/40, Policy Statement PS26/11 notes that some respondents suggested that indicators of decentralization “could focus on established concepts of financial intermediation,” echoing the approach outlined in DEF’s submission.

You can read the final policy proposal here.

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The 21st Century ROAD to Housing Act Becomes Law

On July 11, 2026, the bipartisan housing reform package, the 21st Century ROAD to Housing Act became law. Notably, the package includes a provision prohibiting the issuance of a Central Bank Digital Currency (CBDC) until December 31, 2030. The remainder of the legislative package focuses on housing policy, including reductions to regulatory barriers in housing construction, support to community banks providing home loans, and modernizing Department of Housing and Urban Development programs.

You can read more about the legislation here.

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DEF’s Amanda Tuminelli Named “Stablecoins Most Influential 2026 List”

Congratulations to DEF’s CEO and CLO on being named to the “Stablecoins Most Influential 2026 List” by Stablecon. The list recognizes leaders “shaping the future of the global stablecoin ecosystem.”

You can view the full list here.

Notable & Quotable:

“FLEOA commends the Committee for its efforts to establish a clear regulatory framework for digital assets that promotes responsible innovation while preserving critical criminal, anti-money laundering, counterterrorism financing, sanctions enforcement, and investigative authorities. The Association believes the current version represents meaningful progress toward balancing technological innovation with public safety.”

—Federal Law Enforcement Officers Association, Letter to the Senate Committee on Banking, Housing, and Urban Affairs

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In a new letter to Senate leadership, Senator Wyden said:

“I write to urge you to ensure that any version of the Digital Asset Market Clarity Act (Clarity Act) that is brought to the Senate floor preserves Section 604 of the bill as passed out of the Senate Banking, Housing, and Urban Affairs Committee. Section 604, also known as the Blockchain Regulatory Certainty Act (BRCA), is a bipartisan provision that provides critical safeguards for non-custodial blockchain developers while also ensuring that prosecutorial and investigative resources are used as efficiently and effectively as possible to target bad actors.”

The DEF team wholeheartedly agrees, and we appreciate Senator Wyden and his staff for their continued leadership on this important, bipartisan provision. A comprehensive market structure bill must include strong software developer protections.

You can read the full letter here.

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Law Enforcement Groups Comment on Clarity Act

On July 1, 2026, the Clarity Act won its first endorsement from a major law enforcement organization. In a letter to Senate leadership, the National Organization of Black Law Enforcement Executives (NOBLE) wrote it “believes” the Clarity Act would “provide law enforcement with meaningful new capabilities.” The letter highlights provisions like Section 205, which applies heightened oversight to digital asset kiosks, and the expansion of regulatory obligations on new industry participants under Section 201.

Then, on July 3, 2026, the Major County Sheriffs of America (MCSA) wrote to Senate Banking Committee leadership to inform them that the organization is “now neutral” on the Clarity Act. The update comes as MCSA continues to engage in negotiations and review the draft legislation. The letter asked the Committee to include state and local law enforcement with “a formal role” in the Treasury-led study of mixers and tumblers, as well as in any working groups or interagency advisory bodies currently contemplated in the legislation.

You can read more coverage on the letters here.

The DEF team also compiled a list of the sections in the Clarity Act that provide tools for prosecutors and law enforcement professionals, which you can find here.

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EU’s MiCA Regulation Under Review

On July 1, 2026, the European Union’s Markets in Crypto-Assets (MiCA) regulations went into full effect. After a three-year rollout, all crypto asset service providers with operations in the EU are now required to obtain authorization to continue doing business.

The European Commission also launched a public consultation seeking feedback from industry participants and regulators. The consultation includes a standalone section on issues not originally contemplated by the regulation, including decentralized finance, lending, and staking. Industry participants have the opportunity to provide feedback on whether decentralized protocols and smart contracts should be subject to registration requirements and, if so, whether those requirements should be the same as those applied to MiCA-regulated crypto-asset service providers. The deadline to submit comments is September 30, 2026.

You can learn more about the MiCA review process here.

New DEF Blog: Alexey Pertsev’s Trial Featured at Dutch Blockchain Week

DEF authored a new blog post featuring highlights from a Dutch Blockchain Week 2026 panel. At the center of the conversation was the Tornado Cash case and the appeal of developer Alexey Pertsev. The panelists, a group of lawyers, builders, and human rights defenders, explored a key question: can code commit a crime?

You can read the blog post here.

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Reminder to Join DEF’s OPSeC Initiative

Calling all builders, developers, and investors that are committed to strengthening onchain security: we invite you to take the OPSeC pledge and join DEF’s newly launched Open Protocol Security Coalition (OPSeC). OPSeC is an industry-wide initiative in partnership with Security Alliance (SEAL) and Asymmetric Research that aims to promote operational security across blockchain ecosystems and onchain software. If you’re reading this and are curious to learn more about OPSeC, please email opsec@defieducationfoundation.org.

You can learn more about OPSeC here.

Notable and Quotable

“[N]obody can credibly say phones are too indispensable to count as voluntary exposure while insisting bank accounts are optional. Either both should be protected, or neither should. Based on the arguments made in Chatrie v. United States, it’s time to recognize that the Bank Secrecy Act and warrantless surveillance of financial activity are an unjustified intrusion into people’s privacy.”

-Nicholas Anthony, the Cato Institute

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On June 22, 2026, FinCEN, the Federal Reserve, the Office of the Comptroller of Currency, the Federal Deposit Insurance Corporation, and the National Credit Union Association issued a Notice of Proposed Rulemaking (“NPRM”) on the implementation of customer identification program (“CIP”) requirements outlined in the GENIUS Act. Under the NPRM, Permitted Payment Stablecoin Issuers (“PPSIs”) would be required to collect the name, date of birth, address, and an identification number for any new account opened with the PPSI.

As drafted, the CIP requirements would apply to only “primary market” interactions, such as when a PPSI issues or redeems a stablecoin on behalf of an individual. The current construction does not include secondary market activity, e.g., the purchase of stablecoins from third-party exchanges or peer-to-peer transactions. However, the NPRM requests public comment on whether customer identification should be extended to secondary markets, a potential concern for DeFi users and developers.

Comments on the proposed CIP framework are due on August 21, 2026. You can read the full NPRM here.

DEF Launches OPSeC with Security Alliance and Asymmetric Research

On June 23, 2026, DEF announced OPSeC—Open Protocol Security Coalition—a new industry-wide initiative in partnership with Security Alliance (SEAL) and Asymmetric Research to promote operational security across blockchain ecosystems and onchain software.

We invite builders, developers, and investors that are committed to strengthening onchain security to pledge to join us. If you’re reading this and are curious to learn more about OPSeC, please email info@defieducationfund.org.

You can read the press release announcing OPSeC here.

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Senate Banking Committee Holds ‘Affordability’ Hearing

On June 23, 2026, the Senate Committee on Banking, Housing, and Urban Affairs held a hearing on the “Affordability Agenda.” The hearing focused on the high cost of housing, access to credit, and innovations in the digital asset space that may help to increase affordability. Notably, in his opening statement, Chairman Tim Scott (R-SC) applauded the GENIUS Act’s impact on “fueling financial innovation in America and creating economic opportunity” and encouraged the Committee to push the Clarity Act over the finish line.

Cody Carbone, CEO of The Digital Chamber, highlighted the important role that crypto can play in tackling affordability issues: “digital assets and blockchain are the first real chance in decades to help people move the money they’ve earned more easily to make sending money as simple and efficient as sending an email...”

You can listen to the full hearing here.

HCFS Holds ‘Future of Payments’ and ‘Wall Street to Main Street’ Hearings

This week, the House Committee on Financial Services (HCFS) held two hearings on the future of payments and investments in America.

On June 24, 2026, the full committee discussed the challenges of the current payment system, including fractured oversight and the bank charter process for digital assets. The Committee and witnesses engaged in significant debate regarding “skinny” master accounts with the Federal Reserve, and the possibility of providing eligible payment-focused providers (e.g., stablecoin issuers) with access to Fed-operated infrastructure. You can listen to the full hearing on the future of payments here.

On June 25, 2026, the Subcommittee on Capital Markets heard testimony on shifts in the managed funds landscape, SEC proposals on reducing disclosure obligations, and the role of legislative changes in providing everyday Americans access to capital markets. Of note, Rep. Steil (R-WI), Chairman of the Subcommittee on Digital Assets, credited digital assets for lowering costs for consumers. You can listen to the full hearing on the future of investment here.

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DEF’s CCO Jenn Rosenthal Hosts Developer Panel at Solana Policy Institute’s Chicago Summit

On June 16, 2026, DEF’s Chief Communications Officer Jenn Rosenthal moderated a panel about building onchain infrastructure at the Solana Policy Institute’s Chicago Summit: Washington x Wall Street. Jenn spoke with a panel of developers on how onchain innovations are redefining traditional finance, the current state of U.S. policy and its potential impact on innovating in the U.S., and what developers are thinking about related to future tech trends and innovations.

Illinois Introduces Track on Crypto Transfers

On June 16, 2026, Illinois Governor JB Pritzker signed S.B.3019 as part of the state’s 2027 budget, which requires brokers and exchanges to impose taxes on all crypto transfers—including network fees. In other words, beginning on January 1, 2027, Illinois will impose a new tax of 0.2% on all crypto transfers.

Reporting requirements fall on brokers operating in Illinois and on out-of-state brokers that meet certain requirements. The bill includes strict enforcement mechanisms: failure to appropriately register or comply with recordkeeping requirements will expose brokers to criminal liability.

The bill has rightfully been met with sharp criticism for its far-reaching and punitive nature. S.B.3019 conspicuously removes DeFi-specific protections included in digital asset legislation passed by the state assembly earlier this year.

As Max Levally, CLO at GFX Labs, explained in a recent Substack post: “Illinois taxes digital-asset activity while leaving functionally equivalent banking, brokerage, payment, custody, and settlement activity untouched…The statutory choices show that Illinois knew how to spare DeFi, software development, validators, nodes, and peer-to-peer activity because it had just done so in [previous digital asset legislation]—and then chose not to do so here.”

You can read the full bill here.

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Notable and Quotable

“The Genius Act is working, and finishing the job through the Clarity Act is the best chance Congress has had to set clear rules of the road. Clarity is closer than it’s ever been, and I urge the Senate to finish it this year. Clear US-based rules are what unlock tokenization for ordinary Americans, keeping this activity on shore and creating good paying jobs. Because in the end, the cost of moving money and moving assets is real, and it shows up in every household budget.”

—Cody Carbone, CEO, Digital Chamber

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On June 9, 2026, DEF and the Solana Policy Institute (SPI) submitted a comment letter in response to proposed rulemaking by FinCEN and OFAC to implement anti-money laundering provisions of the GENIUS Act. The proposal would subject regulated stablecoin issuers—called permitted payment stablecoin issuers (PPSIs)—to the Bank Secrecy Act, requiring them to comply with anti-money laundering, countering the financing of terrorism, and reporting obligations.

DEF and SPI’s comments focused on three core principles:

• Compliance obligations should fall on the entities with control over user funds and technical capability to implement BSA requirements;

• Preserve the GENIUS Act’s exclusion of peer-to-peer activity and non-custodial developers from BSA obligations; and

• Ensure secondary market BSA obligations are limited to PPSI-controlled activity.

You can read DEF’s full comment letter here.

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House Ways and Means Hearing on Crypto Tax Legislation

On June 9, 2026, the House Ways and Means Committee held its first legislative hearing on a comprehensive digital asset taxation framework. While six pieces of legislation were considered, four are particularly relevant to DeFi:

• H.R. 9178, the “Less Tax Paperwork for Digital Asset Owners Act,” would establish a de minimis exemption for network fees of $10 or less and provide an alternative method for calculating gains and losses on certain digital assets.

• H.R. 9172, the “Applying Existing Tax Anti-Abuse Rules to Digital Assets Act,” would extend wash-sale and constructive sale rules to digital assets.

• H.R. 9175, “Tax Clarity for Mining and Staking Act,” would treat newly-minted assets as income, but would allow taxpayers to elect to treat them as self-property and defer their tax burden.

• H.R. 9176, “Providing Analogous Rules for Digital Assets Act,” would allow traders and brokers to use mark-to-market accounting and allow taxpayers to lend digital assets without triggering a taxable event.

Committee members and witnesses emphasized the need to remove administrative burdens on taxpayers and the IRS, alike. Lawrence Zlatkin, Vice President of Tax at Coinbase, applauded H.R. 9178’s proposed de minimis exemption for small network fees but urged Congress to go further by extending similar relief to digital asset transactions more broadly, noting that “Americans shouldn’t need an account to buy jeans, and the IRS doesn’t benefit from tracking millions of transactions that generate little or no revenue…”

Witnesses also debated the proposed application of wash-sale rules to digital assets in H.R. 9172. The wash-sale rule prevents investors from selling securities at a loss, then immediately repurchasing that same asset to reduce their tax liability. In the DeFi context, compliance would be particularly burdensome, as individual users would be responsible for tracking gains and losses across large volume transactions and multiple self-custodied wallets.

You can watch the full hearing here.

DEF’s Policy Lead Gavin Zavatone Launches Defend Developers PAC

On June 3, 2026, DEF Policy Lead Gavin Zavatone launched Defend Developers PAC (DDPAC), a new hybrid political action committee. As the first unaffiliated PAC dedicated exclusively to protecting developers and crypto builders, DDPAC will raise funds from both individuals and corporations. DDPAC aims to support congressional incumbents with a demonstrated record of supporting developers, helping to build a durable pro-developer legislative coalition in Congress.

Gavin joined Crypto in America to discuss DDPAC’s launch and the latest developments surrounding the CLARITY Act. During the conversation, he emphasized the importance of educating policymakers and the public about the bill’s robust anti-money laundering and law enforcement provisions, while also highlighting the need to preserve strong protections for developers. As Gavin explained, “the most important thing is making sure that the protections for the BRCA remain strong and remain in the bill, because if we’re going to establish a regulatory framework for the next century of digital assets, we need to protect people from inappropriate misclassification.”

You can listen to the full Crypto in America episode here, and learn more about the Defend Developers PAC here.

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60+ Founders and CEOs Submit Letter Advocating for the BRCA

On June 9, 2026, more than 60 founders and CEOs sent a letter to Senate Majority Leader John Thune (R-SD) and Senate Minority Leader Chuck Schumer (D-NY), urging the Senate to preserve the Blockchain Regulatory Certainty Act (BRCA) as it appears in Section 604 of the CLARITY Act.

As the letter explains, “Without the BRCA in its current form, market structure legislation risks failing to provide the certainty needed to support broad innovation in the United States. From core Bitcoin development to novel DeFi smart contract designs, developers need clear legal certainty to openly build, maintain, and contribute to community-driven software projects.”

You can read the full letter here.

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CRS Publishes New Report “Cryptocurrency: Regulatory & Legislative Policy Issues”

On May 29, 2026, the Congressional Research Service (CRS) published a new report, “Cryptocurrency: Regulatory & Legislative Policy Issues,” surveying recent developments in digital asset policy and outlining potential issues facing Congress and regulators.

Notably, the report includes a dedicated section titled, “What to Do About Decentralized Finance,” which examines the ongoing debate over whether DeFi should be regulated differently from centralized cryptocurrency service providers.” The report also cites DEF research showing that the United States’ share of global open-source software development declined from 25% in 2021 to 18% in 2025, highlighting concerns that regulatory uncertainty may be driving innovation offshore.

You can read the full report here.

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SEC Director Discusses Priorities for SEC-CFTC Harmonization

On June 4, 2026, the SEC Division of Trading and Markets Director Jamie Selway spoke about the road ahead for SEC-CFTC collaboration at the Piper Sandler Global Exchange & Fintech Conference in New York.

In his remarks, Selway explained that “effective harmonization means efficiency and flexibility for registrants, as well as lower barriers to innovation.” He noted that the SEC is prioritizing policy harmonization with the CFTC and is actively exploring pathways for novel products as part of its broader efforts to modernize regulation.

You can read Selway’s full speech here.

Notable and Quotable

“Candidates who champion digital asset policy and financial privacy don’t have to look far for voter support. It’s already there. Political support for crypto has more than doubled since 2024, and 84% of Americans believe individuals, not companies, should own their personal data. In races decided on the margins, this constituency can be the difference.”

—Julie Stitzel, Chief Policy Officer, DCG

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On May 29, 2026, the CFTC published three significant statements. First, the Divisions of Clearing and Risk, Market Oversight, and Market Participants issued a staff advisory regarding 24/7 trading, clearing and settlement. The advisory outlines staff expectations for risk management, compliance, and clearing for regulated entities considering 24/7 trading. The advisory acknowledges the role on-chain trading has played in stoking demand for 24/7 trading, noting, “[t]he ability to engage in, and maintain, markets on a 24/7 basis has been, in part, paralleled by evolutions in market technologies, such as blockchain networks and decentralized infrastructure.”

Second, the CFTC approved the listing of Kalshi’s bitcoin perpetual futures contract BTCPERP, which references the spot price of Bitcoin and marks the first approval of its kind in the U.S. In an accompanying opinion piece, CFTC Chairman Michael Selig described the approval as a milestone for domestic digital asset markets, stating that “today’s action to onshore crypto asset perpetuals was the natural extension of this American achievement and reinforces U.S. leadership in digital financial technology.” Alongside the approval, the CFTC issued a policy statement outlining the agency’s approach to perpetual contracts. The policy statement emphasized that products based on assets other than Bitcoin will continue to be reviewed on a case-by-case basis and encouraged industry engagement on the review and approval for new perpetual futures.

Third, the CFTC’s Market Participants Division issued an interpretation and no-action position in response to a request from Coinbase Financial Markets, a registered futures commission merchant, confirming the categorization of certain crypto asset perpetuals as foreign futures and addressing FCM transfers of customer crypto assets to foreign brokers as margin. The positions relate to Coinbase’s plan to offer certain digital commodity derivatives products listed on its affiliated foreign exchange, Deribit FZE.

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SEC Commissioner Pierce Delivers Speech on Permissionless Privacy Enhancing Technologies

On May 27, 2026, SEC Commissioner Hester Pierce spoke about privacy enhancing technologies at Georgetown Law’s Institute of International Economic Law. Her remarks underscored that personal privacy and national security are not at odds. Commissioner Peirce also encouraged collaboration with the SEC’s Crypto Taskforce on approaches to anti-money laundering that protect individual privacy.

She reflected: “[E]mpowering government to be able to identify, pursue, and punish the bad guys is important to the security of the nation and its people, but so too is empowering people to protect information about their lives, including their financial lives.”

You can read Commissioner Pierce’s full speech here.

Senate Finance Committee Hearing on Department of Treasury Budget Request

On June 3, 2026, Treasury Secretary Scott Bessent testified before the Senate Finance Committee on President Trump’s proposed Treasury Department budget for FY 2027. The hearing focused primarily on the implementation of the Working Family Tax Cuts Act, the Trump-IRS settlement agreement, and the national debt.

Committee Chairman Sen. Mike Crapo (R-ID) and Sen. Steve Daines (R-MT) both highlighted the need for clear “rules of the road” for crypto taxation in order to “support innovation, and help ensure that the United States remains competitive in the global digital markets.” Of note, Secretary Bessent encouraged members to “get behind” the Clarity Act market structure legislation.

You can watch a recording of the hearing here.

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Notable and Quotable

“From a national security perspective, regulatory clarity is an enforcement advantage. When responsible activity is brought onshore and subject to U.S. oversight, law enforcement gains visibility. When companies operate under clear compliance obligations, investigators gain stronger partners. When America leads, adversaries and illicit actors have fewer opportunities to exploit regulatory gaps.”

– Letter to Senate Leaders from Blockchain Association signed by 160 former national security, intelligence, and law enforcement professionals in support of the Clarity Act

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On May 21, 2026, the U.S. House Committee on Financial Services Subcommittee on National Security, Illicit Finance, and International Financial Institutions held a hearing titled, “Modernizing the BSA for Financial Crime in the 21st Century.”

During the hearing, subcommittee members and witnesses discussed problems with the Bank Secrecy Act (BSA), ranging from its capacity for mass surveillance to its inefficient and burdensome AML standards and framework, and potential ways to modernize the BSA.

Notably, witness Nicholas Anthony of the Cato Institute offered three key numbers to summarize the BSA: 59 billion, 28 million, and 275. Anthony: “In a single year, US financial institutions spend an estimated $59 billion complying with the Bank Secrecy Act. This regime forced them to file 28 million reports on their customers, and yet those reports only tipped off 275 investigations by the IRS. $59 billion in compliance costs, 28 million privacy violations, only 275 leads. It is as clear as thunder on a summer’s night that we have a problem, and as the Grateful Dead might say, if the thunder don’t get you, the lightning will. 83% of Americans said that the government should need a warrant to access their financial records, and 79% said banks sharing records without a warrant is unreasonable. Yet financial surveillance is expanding.”

You can watch a recording of the full hearing here.

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President Trump Signs Executive Order: Fintech Innovation and Regulatory Frameworks

On May 19, 2026, the White House published an Executive Order (EO) entitled, “Integrating Financial Technology Innovation into Regulatory Frameworks.” The Order gives federal financial regulators including the CFPB, SEC, CFTC, and others, 90 days to review current regulatory and supervisory practices that “should be updated to facilitate innovation,” and 180 days to “encourage innovation” based on the findings of their review. The EO also directs the Federal Reserve Board to review policies governing access to the Fed’s payment accounts and services for non-bank financial institutions.

“To foster financial innovation,” the order states, “the Federal Government must update regulations to allow integration of digital assets and innovative technology into traditional financial services and payment systems.”

You can read the EO here.

SEC Commissioner Hester Pierce’s Next Act: Regent University School of Law

On May 19, 2026, the Regent University School of Law announced that Securities and Exchange (SEC) Commissioner Hester Pierce will be joining its faculty as an Associate Professor in November 2026, signaling the coming end of Commissioner Pierce’s time at the SEC.

Pierce has been a SEC Commissioner since 2018, and serves as the head of the SEC’s Crypto Task Force. She has been a fantastic champion for crypto and the DeFi industry, who has benefitted immeasurably from her thoughtful perspectives, colorful dissents, and consistently measured guidance. DEF congratulates Commissioner Pierce on this exciting next chapter!

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Representatives Miller and Horsford Introduce Digital Asset PARITY Act

On May 19, 2026, Representatives Miller (R-OH) and Horsford (D-NV) introduced new bipartisan legislation — the Digital Asset Protection, Accountability, Regulation, Innovation, Taxation, and Yields Act (PARITY) Act, intended to modernize the federal tax code for digital assets. The PARITY Act would eliminate capital-gains accounting on “regulated payment stablecoins,” excluding depegged stablecoins; extend wash sale rules to cryptocurrency; and direct the IRS to review de minimis exemptions, among other things.

You can learn more about the bill here, and read the bill text here.

DEF CEO Amanda Tuminelli Live on X: What Comes Next for the Clarity Act

On May 20, 2026, DEF CEO & CLO Amanda Tuminelli joined Stand With Crypto for a live X spaces conversation with Ji Kim of Crypto Council for Innovation, Cody Carbone of the Digital Chamber, and Summer Mersinger of Blockchain Association to discuss the road ahead for market structure legislation. During the call, Tuminelli emphasized the importance of ensuring robust developer protections remain in place in market structure legislation: “I think it’s really important that we continue to hold the line on developer protections.”

Looking ahead to reconciling the Senate Banking and Senate Agriculture versions of the bill, Tuminelli cautioned that, “it’s going to be really important to make sure that the developer protections on the Agriculture side of the bill, so that the protections from misapplication of the Commodities Exchange Act stay looking good and protective for developers…”

You can listen to the full update from Stand With Crypto here.

Notable and Quotable

“If you don’t feel like you can actually build a protocol here [in the United States] in a safe way without having to register as a money transmitter or something like that, I don’t think we’ve done our jobs.”

– Rebecca Rettig, DEF Board Member and COO & CLO of Jito Labs on the Chopping Block Podcast

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On May 11, 2026, the Senate Banking Committee released the latest text of The Digital Asset Market Clarity Act. Among other things, the proposed legislation included developer protections under the securities laws (Sec. 601), the Blockchain Regulatory Certainty Act (BRCA) (Sec. 604), and self-custody protections (Sec. 605), which are important provisions that protect developers and infrastructure providers from being treated as intermediaries. You can find a section-by-section of the updated Clarity Act linked here.

This draft of Section 604, the BRCA, reflected the compromise from Senator Chuck Grassley (R-IA), Chairman of the Senate Judiciary Committee, and Senator Cynthia Lummis (R-WY), which addressed concerns raised by Senator Grassley. Specifically, the new text explicitly preserves the application of 18 U.S.C. 1960(b)(1)(C) to any person that specifically intends to transfer funds on behalf of another person when those funds are known to be derived from a criminal offense or intended to promote or support unlawful activity.

Identifying and Tracking Anti-DeFi Amendments

Senators filed more than 100 amendments ahead of the May 14th markup. DEF reviewed the amendments, and then compiled a list of anti-DeFi amendments, which can be found on X here.

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The Senate Banking Committee Clarity Act Markup

On May 14, 2026, the Senate Banking Committee advanced H.R. 3633—The Digital Asset Market Clarity Act of 2025—out of committee with a bipartisan 15-9 vote. Senators Ruben Gallego (D-AZ) and Angela Alsobrooks (D-MD) joined the Republican majority in support of the legislation. As Chairman Scott (R-SC) emphasized in his opening statement, the legislation “brings digital assets out of the shadows and into a system that is safer, fairer, and more transparent.”

During the markup, Members raised open issues such as ethics guardrails, law enforcement and illicit finance concerns around DeFi, and community bank provisions. In particular, there was a significant discussion about the role of crypto mixers. Senator Moreno (R-OH) and Senator Lummis (R-WY) highlighted the importance of a technology-neutral approach to combatting illicit finance, with Senator Lummis reminding the committee, “if you carve out one thing for specific treatment, it sends a signal that DeFi software is not welcome in this country, and we don’t want to send that signal.” Members also underscored the robust anti-money laundering provisions and law enforcement tools in the Act.

The post-markup legislative text incorporates bipartisan amendments from committee members, covering issues including insider trading, consumer protection, and regulatory sandboxes for the use of AI in financial technology tools. Notably, amendment #122 introduced by Senator Lummis, but reflecting a bipartisan agreement with Committee Democrats, removed protections from Section 301 that made it explicit that rulemakings under that provision would not apply to non-controlling blockchain developers. While it is extremely positive that this bill will advance with bipartisan support, this compromise was a net-negative outcome for software developers.

Rebecca Rettig, DEF Board Member and COO + CLO of Jito Labs, highlighted the significance of ensuring software developer protections remain in the legislation as negotiations continue (see Coindesk’s The Policy Protocol clip here).

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What Comes Next: The Road to the Floor

Though they both voted yes, demonstrating their commitment to moving this bill forward, Senators Alsobrooks and Gallego were careful to signal their votes should not be read as commitments to voting yes on the Senate floor.

Senator Alsobrooks stated: “The digital revolution is upon us, and it has presented a clear opportunity to support small businesses, generate wealth, spur innovation, and support younger Americans who want to be part of this revolution. And this digital revolution is happening with us or without us—we have a responsibility to regulate it to create rules of the road.” However, Senator Alsobrooks was direct, noting, “My vote today is a vote to keep working in good faith. It does not mean that I’ll be voting for the passage of the Clarity Act on the floor because we still have so much work to do.”

Next up? The Senate Banking Committee will confer with the Senate Agriculture Committee to reconcile their version of the bill, The Digital Commodity Intermediaries Act (which deals with Commodity Futures Trading Commission jurisdiction) in preparation for floor consideration. And now we wait for the Senate to schedule a full Senate floor vote.

In their closing remarks, both Chairman Scott and Senator Lummis stressed the importance of continuing the work, with Lummis vowing not to let go “until people on both sides of the aisle are satisfied that this is a product we can all be proud of.”

SEC’s Landon Zinda Explains DeFi Front-End Guidance

On May 11, 2026, Landon Zinda, Counsel to SEC Chairman Paul Atkins and Senior Advisor for the Crypto Task Force, sat for a conversation with Tony Edward for the “Thinking Crypto” podcast. Notably, in the interview, Zinda explained that DeFi interfaces “act more like tools for the user. They allow them to execute their own decisions and make decisions for themselves and they just relay those messages to the blockchain, and so the staff is making a big statement that these things don’t have to register.”

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Notable and Quotable

“This legislation does not take sides between traditional finance and new technology, or Republicans and Democrats. It takes the side of everyday Americans. It brings digital assets out of the shadows and into a system that is safer, fairer, and more transparent. This is what good governance looks like.”

– Senator Tim Scott (R-SC) opening remarks at Senate Banking Committee markup of the CLARITY act

On May 1, 2026, DEF and Solana Policy Institute (SPI) submitted a comment letter to the Office of the Comptroller of the Currency (OCC) in response to the agency’s request for comment on proposed rules implementing the GENIUS Act, which would establish a federal licensing framework for payment stablecoin issuers.

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In the letter, DEF and SPI argue that a “coherent and durable” approach to implementing the framework should be grounded in three core principles: (1) control as the defining regulatory principle, (2) function and principle over form, and (3) alignment with the statutory text and existing guidance.

You can read DEF’s X thread on the letter here.

Law Enforcement Leaders Publish Op-eds Supporting Developer Protections

This week, two law enforcement leaders authored opinion pieces arguing that misapplying 18 U.S.C. § 1960 to non-custodial blockchain developers is a misuse of a statute designed for traditional money transmitters.

In an op-ed published in RealClear Markets on May 2, 2026, John Bridge, a retired Senior Inspector with the U.S. Marshals Service, gave a historical overview of American tech policy, underscoring that “writing and publishing code is not money transmission.” Bridge further contended that Congress should apply to blockchain technology the same principle of technological neutrality that it historically applied to telephone networks, the internet, and dual-use government technologies like TOR and GPS.

In an op-ed published in Coindesk on May 6, 2026, Democratic Sacramento District Attorney Thien Ho, running for U.S. Congress, explained that ambiguous rules and regulation by prosecution harm not only developers, but also U.S. competitiveness. These practices, he wrote, “drive industries underground and offshore,” ceding American technological leadership and pushing innovation beyond the reach of U.S. law enforcement.

Notably, both Bridge and Ho expressed support for robust enforcement against custodial platforms that facilitate illicit activity, who actually act as money transmitters, or the bad actors themselves. The answer, as Ho explained, is to “identify the actual bad actor, build the case and prosecute with evidence.”

DEF’s CEO Amanda Tuminelli Discusses Money Transmission Laws on ‘Law of Code’

On May 4, 2026, DEF’s CEO and CLO Amanda Tuminelli joined Jacob Robinson on a Law of Code special long-form episode on money transmission laws, developer protections, and related pending legislation in Congress. Amanda highlighted nuances of the DOJ’s 2025 Memo, Storm v. US trial, the Blockchain Regulatory Certainty Act (BRCA) and the Promoting Innovation in Blockchain Development Act.

You can listen to the podcast here.

Notable and Quotable

“Neither the developers nor the software itself controls other people’s funds or transfers funds on their behalf. Charging them under a statute built for traditional financial intermediaries is a mistake, because it is misinformed and misdirected.”

– Thien Ho, Sacramento District Attorney in CoinDesk Op-ed “The Government Should Promote Innovation, Not Punish it”

On April 22, 2026, the House Financial Services and House Energy and Commerce Committees announced two landmark data privacy bills, the GUARD Financial Data Act and the SECURE Data Act. Together, these bills represent a joint effort between the two committees to create a national standard on data privacy.

The bills would require technology companies and financial institutions to limit the collection of consumer data and obtain explicit opt-in consent when handling sensitive information. The legislation would also grant consumers the right to request deletion of their data, among other protections. You can read a one-pager about the bills here.

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Acting Attorney General Blanche Discusses Developer Protections at Bitcoin 2026

On April 27, 2026, Acting U.S. Attorney General Todd Blanche and FBI Director Kash Patel joined Coinbase Chief Legal Officer Paul Grewal for a virtual discussion at the Bitcoin 2026 conference, where Grewal moderated a conversation on the government’s approach to digital assets. The conversation examined the DOJ’s posture toward the crypto industry under the Trump administration, with developer protections a key topic of discussion. Blanche stated:

“If you are developing software, if you’re a coder, if you were part of that process and you’re not the third party user and you are not helping and knowingly the third party is using what you develop to commit crimes, you are not going to be investigated and not going to be charged.”

Notably, Blanche said that developers under investigation and their counsel “should feel very comfortable communicating” with his office if they believe prosecutors are acting inconsistently with the DOJ’s April 2025 memo. While this is a positive sign from the DOJ, durable clarity and protections for developers require concrete legislative action.

You can watch the full interview here.

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DEF is Long DeFi: Treasury Management Update

The DEF team is now actively deploying portions of our treasury’s balance sheet into leading DeFi protocols: Aave, Aerodrome, Compound, Uniswap, and Morpho. DeFi is the future of finance.

You can read more about our treasury management strategy here.

Notable and Quotable

“We need innovation, we need smart coders, and we need open source coding. We need to be able to put together platforms that make the industry better. And the coders or the folks that are upstream or downstream of the coders shouldn’t feel like they are going to be prosecuted because some third-party down the road uses whatever was developed to commit crimes.”

– Acting Attorney General Todd Blanche remarks at Bitcoin 2026

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On April 21, 2026, DEF, alongside a coalition of builders, investors, users, and advocates across the digital assets industry, submitted a letter to the Securities and Exchange Commission (SEC). The letter responds to the April 13 statement from the Division of Trading and Markets staff regarding the potential application of broker-dealer registration requirements to non-custodial user interfaces “designed to assist users engaging in user-initiated crypto asset securities transactions.”

In our letter, we expressed support for the Staff’s thoughtful and pragmatic approach to distinguishing non-custodial user interfaces from activities that constitute broker-dealer activity, and encouraged the SEC to build on the principles in the Statement through notice-and-comment rulemaking to establish durable regulatory clarity.

You can see DEF’s X post here.

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House Committee on Homeland Security: ‘Online Scam’ Hearing

On April 21, 2026, the U.S. House Committee on Homeland Security held a joint hearing of the subcommittees on Border Security and Enforcement and Cybersecurity and Infrastructure Protection titled, “Online Scams, Crypto Fraud, and Digital Extortion: An Examination of How Transnational Criminal Networks Target Americans.”

During the hearing, subcommittee members and witnesses discussed the current landscape of online scams and the potential for related national security threats. In particular, several speakers highlighted the growing role of AI in enabling sophisticated fraud schemes, noting that the integration of AI presents a double-edged sword; while AI can facilitate more advanced scams, it may also serve as a tool for detection and prevention.

Notably, Ari Redbord, Global Head of Policy at TRM Labs, stated:

“The solution to the criminal abuse of AI is not to ban or stifle the technology. It is to use it and use it wisely… We live in an age where the private sector holds the data, while the public sector holds the authorities. Neither can confront this threat alone.”

Redbord described TRM’s Beacon Network (Beacon) as the largest public-private network dedicated to the interdiction of illicit proceeds and the recovery of stolen funds in the digital asset ecosystem. Beacon connects major crypto exchanges with approximately 70 law enforcement agencies across the United States and allied countries.

You can watch a recording of the full hearing here.

Federal Reserve Chair Nominee Kevin Warsh’s Nomination Hearing

On April 21, 2026, the Senate Banking Committee held a confirmation hearing to consider Kevin Warsh to serve as the next Chair of the Federal Reserve. During the hearing, members examined Warsh’s views on a range of financial policy issues, including the role of emerging technology in the financial system. On the topic of digital assets, Senator Cynthia Lummis (R-WY) asked: “Yes or no, do you believe that digital assets should be incorporated into our financial industry so Americans have new investment opportunities and consumer protections?”

Mr. Warsh responded affirmatively, noting that “digital assets are already part of the fabric of our financial services industry in the United States. Yes.”

A recording of the full hearing is available here.

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DEF’s CEO on Coindesk Discussing SEC Statement on DeFi User Interfaces

On April 17, 2026, DEF Chief Executive Officer & Chief Legal Officer Amanda Tuminelli joined CoinDesk’s The Policy Protocol, hosted by Rebecca Rettig and Renato Mariotti, to discuss the SEC’s staff statement on user interfaces (described above). Tuminelli explained that unlike a project-specific no-action letter, the staff statement is broader in scope and more widely applicable across similar user interfaces. Tuminelli also noted that while the statement is a major step forward, it remains temporary and subject to change because it reflects staff guidance rather than formal Commission action. As such, she emphasized the need to “formalize the criteria and principles in the staff statement into something more durable,” which is a key priority for DEF as it continues pushing for lasting, technology-neutral regulatory clarity for DeFi builders and users, consistent with our April 21st coalition letter (discussed above and here).

HFSC Hearing: Effectiveness of U.S. Sanctions Programs

On April 22, 2026, the House Financial Services Committee held a hearing entitled, “Evaluating the Effectiveness of U.S. Sanctions Programs,” which examined how current U.S. sanctions policy advances foreign policy and national security objectives.

Jonathan Burke, Assistant Secretary for Terrorist Financing at the Department of Treasury, was the sole witness for the hearing. Digital assets surfaced as a recurring theme throughout the hearing, and Burke explained that adversaries are leveraging “increasingly sophisticated methods to evade sanctions including shadow fleets, shell companies, digital assets and alternative payment systems.”

Committee members questioned Burke on the implementation of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, and Burke pointed to Treasury’s proposed stablecoin rules as the Administration’s primary framework for addressing crypto-related AML compliance.

You can watch a recording of the full hearing here.

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Technically Legal Podcast Features DEF’s Senior Counsel and Discussion About Crypto Regulation

On April 16, 2026, DEF Senior Counsel Ayana Dow joined Chad Main on the Technically Legal Podcast to discuss her path through corporate law, financial services, and Congress before pivoting to crypto policy and advocacy.

During the podcast, Dow spoke to DEF’s mission advancing sound DeFi policy, as well as her work on the issues defining the moment: GENIUS Act implementation, market structure, and software developer protections.

On the state of play in Congress, Dow said: “I really see this as the years of rulemaking now that we’re in this – market structure obviously is a huge [overhaul] and has taken a lot of work, a lot of bipartisan talks from all sides and folks in the industry.” And, on interagency coordination, she noted that while harmonization between the SEC and CFTC has long been a stated goal, “this year is when we’re actually seeing it really play out.”

Listen to the full podcast episode here.

Notable and Quotable

“Bitcoin is a valuable computer science tool as a power projection, and – outside of the economic formulation of it – it has really important computer science applications for cybersecurity.”

– Navy Admiral Samuel Paparo, testifying before the House Armed Services Committee on “U.S. Military Posture and National Security Challenges in the Indo-Pacific Region”

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On April 13, 2026, the Securities and Exchange Commission’s (SEC) Division of Trading and Markets issued a staff statement clarifying when certain user interfaces that facilitate crypto asset securities transactions can operate without registering as broker-dealers under the Section 15 of the Securities Exchange Act of 1934.

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The staff statement defines a “covered user interface” as a non-custodial, user-facing tool such as a website, mobile app, or wallet interface (front-end) that makes it easier for users to initiate self-directed transactions through their self-custodial wallets. To fall within the statement, a “Covered User Interface Provider” must meet a list of conditions, including avoiding nine specifically prohibited activities. Notably, Covered User Interface Providers can receive transaction-based compensation so long as it is limited to a “fixed charge” that is based on objective factors, applied consistently, and agnostic as to product, route, venue, and counterparty. SEC Commissioner Hester Peirce commended the staff for issuing the statement, but also said she favors “a more permanent regulatory approach that addresses the broker definition in light of current market circumstances.”

DEF is grateful to SEC staff for this statement and for engaging with digital asset industry participants as they develop regulatory frameworks that enable and incentivize innovation.

If you want to continue digging into this topic, you can review the joint proposal previously submitted to the SEC by DEF and a16z Crypto, proposing a safe harbor framework for DeFi front-ends.

Treasury Secretary Bessent’s Op-Ed Calls for Robust Developer Protections

On April 8, 2026, Treasury Secretary Scott Bessent authored an op-ed in the Wall Street Journal, urging Congress to pass the Digital Asset Market Clarity Act, the Senate’s digital asset market structure bill. Secretary Bessent framed the legislation as a necessary complement to the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, arguing that stablecoin legislation cannot deliver its full promise without a broader market structure framework and warning that continued regulatory uncertainty would push digital assets development offshore.

Notably, Bessent explicitly named “developer protections” as a core tenet of the bill, and called for more legal clarity for American software developers to keep innovation open, secure, and domestically built. On April 10, 2026, Secretary Bessent’s sentiments were echoed by Patrick Witt, Executive Director of the President’s Council of Advisors on Digital Assets, who explained that “protecting software developers is one of the most important aspects” of the market structure bill and a “core pillar of making the U.S. the crypto capital of the world.” Witt added that “criminalizing code does nothing but drive innovation offshore.”

Representative Barry Moore and CFTC Chairman Selig Discuss Software Developer Protections

On April 16, 2026, the House Committee on Agriculture held a hearing entitled “For the Purpose of Receiving Testimony from the Honorable Michael Selig, Chairman, U.S. Commodity Futures Trading Commission.” During the hearing, Rep. Barry Moore (R-AL) voiced his “concern that software developers and people building blockchain infrastructure could once again be caught up in regulation by enforcement under a future administration,” and asked “what the CFTC is doing to help build a durable framework that protects people who are simply building software and not holding customer funds so we do not go backwards a few years from now?”

In response to questions about trust and decentralization, CFTC Chair Selig highlighted the importance of protecting software developers, emphasizing that legal uncertainty for developers “pushed innovators offshore” and “caused it to really languish here in the United States.” Watch the full hearing here.

CFTC Appoints Inaugural Members to New Innovation Task Force

On April 10, 2026, Commodity Futures Trading Commission (CFTC) Chairman Michael Selig announced the inaugural members of the new Innovation Task Force, which is charged with developing a clearer regulatory framework for emerging technologies in U.S. derivatives markets. Michael Passalacqua, senior advisor to Chairman Selig, leads the task force, which will focus on crypto assets, artificial intelligence, and prediction markets, and includes both CFTC staff and private-sector experts.

Treasury Department Launches Cybersecurity Information-Sharing Initiative

On April 9, 2026, the U.S. Department of the Treasury, through its Office of Cybersecurity and Critical Infrastructure Protection (OCCIP), announced a new cybersecurity information-sharing initiative for the digital assets industry. The Treasury Department’s announcement highlighted that digital asset firms are now an increasingly important part of the financial system that require improved cybersecurity measures to appropriately protect market stability and consumers. The initiative aims to strengthen resilience against growing cyber threats by providing eligible U.S. digital asset firms with timely cyber threat intelligence to help identify, prevent, and respond to attacks targeting their systems and customers.

Generally speaking, the OCCIP initiative reflects a broader policy shift: by creating a formal channel for government-industry coordination and proactive threat sharing, Treasury is moving from reactive enforcement towards preventative, information-driven oversight.

SEC Chairman Debuts “Material Matters” Podcast

On April 16, 2026, SEC Chairman Paul Atkins announced the launch of “Material Matters,” a new podcast to “provide the American public with an inside look at the SEC’s vital work.” In the debut episode, “Commissioners Set the Course,” Chairman Atkins sits down with Commissioners Mark Uyeda and Hester Peirce to discuss work still ahead at the SEC, including digital asset regulation.

Among the themes raised in the conversation, Commissioner Peirce emphasized that “the beauty of the technology is that it allows you to disintermediate so that peers can transact with one another directly or through the intermediation of technology…through the power of smart contracts” and that it is the SEC’s role “to make [the United States] the place where people want to innovate whether it’s in crypto or something else.”

Watch the podcast here.

DEF’s CEO Amanda Tuminelli Joins Crypto in America

On April April 10, 2026, DEF CEO & CLO Amanda Tuminelli joined Crypto in America to discuss the recent Rule 29 hearing in U.S. v. Roman Storm as well as the state of market structure legislation.

In U.S. v. Storm, Tuminelli noted that Judge Katherine Polk Failla’s questioning was balanced, which makes it difficult to draw conclusions about next steps, though the number of questions around retrial scheduling made her less optimistic about dismissal. On the broader implications of the case for U.S. builders, Amanda stated:

“It tells developers if you make an immutable tool, or any tool that’s neutral but you don’t have control over it, you can still be held responsible for what other people do with that tool. And that’s a limitless proposition that doesn’t just affect crypto; that’s any software tool that you put into the world and no longer have control over.”

Watch the full Crypto in America episode here.

Notable and Quotable

“Crypto is forcing the Commission to confront its inner demons that have driven it toward ever more expansive readings of the securities laws. Recent history is littered with a patchwork of no-action letters and enforcement actions that have contorted the term ‘broker’ beyond recognition […] People have shown great ingenuity in developing crypto wallets and front ends that serve users well. It would be a shame if investors in crypto asset securities transactions were unable to use these tools because of an overly broad reading of the term ‘broker.’”

– SEC Commissioner Hester Pierce’s public response to the Division of Trading and Markets’ Staff Statement on Covered User Interfaces

On April 1, 2026, DEF submitted a letter to the Securities and Exchange Commission (SEC) Crypto Task Force responding to Commissioner Hester Peirce’s December 2025 Request for Information (RFI) on how the SEC should approach crypto assets trading on national securities exchanges and alternative trading systems.

In the letter, DEF emphasized that the SEC should not misclassify DeFi technology and developers as exchanges when neither are actually performing exchange functions. Specifically, the letter calls on the SEC to adopt a functional test for an exchange “facility” so that only those actually performing exchange functions are in scope, and not disintermediated software, automated market makers (AMMs), smart contracts, or developers. The letter further urges the SEC to avoid treating developers as a “group of persons” subject to exchange regulation, except in cases where a developer both provides a product that performs an exchange function and acts in concert with an existing exchange or other party to carry out that function. Where there is no shared intent or control over exchange functions, developers should not be treated as an exchange just because their software is used by one.

Read the full letter here.

SEC Chairman Atkins’ Vanderbilt Digital Assets Summit Remarks

On April 6, 2026, SEC Chair Paul Atkins participated in a fireside chat at the Digital Asset Summit in Nashville, Tennessee, hosted by Vanderbilt University Law School and the Blockchain Association.

The discussion focused on advancing regulatory clarity for digital assets, including a forthcoming “Reg Crypto” framework under the Securities Act of 1933 to regulate token fundraising. Chair Atkins also highlighted the challenges of applying existing securities laws to decentralized systems and previewed a new approach under the Securities Exchange Act of 1934, including an “innovation exemption” aimed at enabling DeFi experimentation within a defined regulatory framework.

Click here to watch the full fireside chat.

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U.S. Treasury Rule Proposal: Implementing GENIUS Act’s Requirements to Counter Illicit Finance

On April 8, 2026, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) issued a joint proposed rule to implement provisions of the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act). The proposed rule would classify permitted payment stablecoin issuers (PPSI’s) as “financial institutions” under the Bank Secrecy Act (BSA), and not “money services business.”

As directed by the GENIUS Act, the proposal requires PPSI’s to establish and maintain an anti-money laundering/counter financing of terrorism (AML/CFT) program, report suspicious financial activity, and implement effective sanctions compliance programs. It also mandates that PPSI’s maintain the technical capabilities, policies, and procedures necessary to block, freeze, or reject illicit transactions and comply with lawful orders.

Notably, the rulemaking establishes definitions for a “primary market” and a “secondary market,” assigning obligations to PPSIs in each. The rule defines “secondary market” as “payment stablecoin activity that does not directly involve the PPSI as a party to the transaction other than via a smart contract” (p. 13) and further proposes secondary market obligations for PPSIs (p. 36). This framework suggests that DeFi platforms and peer-to-peer (P2P) exchanges could be included within secondary markets, but does not appear to put obligations on actors other than PPSIs. Importantly, issuers will not be required to file Suspicious Activity Reports (SARs) for activity occurring in the secondary market.

Read the proposed rule here.

FinCEN Proposes Rule: Modernizing Bank Secrecy Act Implementation

Earlier in the week, FinCEN announced a proposed rule to “fundamentally reform” AML/CFT programs in an effort to modernize the BSA. The proposed rule would (i) provide greater flexibility and discretion for lower-risk reporting to reduce unnecessary regulatory burden, (ii) require regulators to consult with FinCEN prior to AML/CFT enforcement actions, and (iii) set standards for AML/CFT program effectiveness in combatting and preventing illicit activity. There will be a 60-day public comment period for the proposal once published in the Federal Register. A summary of the key changes in FinCEN’s proposed rule is available here.

As DEF has written previously, the BSA is largely ineffective and burdensome. Despite imposing significant compliance costs, the BSA has demonstrated minimal success in proactively detecting and preventing financial crimes. It is encouraging to see FinCEN and the Treasury Department take steps to modernize and refine the financial integrity regime.

Read the full proposal here.

Alabama and West Virginia Advance DUNA Statutes

On April 2 and April 5, 2026, Alabama and West Virginia advanced versions of the Decentralized Unincorporated Nonprofit Association (DUNA) Act, marking a significant step for decentralized autonomous organizations (DAOs) in the United States. While West Virginia’s bill awaits the Governor’s signature, Alabama Governor Kay Ivey has signed the state’s bill into law. These states are the second and third to adopt such legislation, following Wyoming, which enacted its DUNA law in 2024.

As a reminder, DAOs are blockchain-based entities governed by token holders, with decisions made through on-chain voting rather than traditional management structures. These new laws grant DAOs formal legal status and limited liability protections, addressing a long-standing gap in how decentralized organizations are treated under existing legal frameworks. By establishing a recognized entity structure, DUNA statutes allow DAOs to own property, enter contracts, and interact more easily with traditional institutions.

The adoption of DUNA frameworks at the state level signals growing momentum toward legal clarity for decentralized governance and may help inform future federal approaches to regulating DeFi and blockchain-based organizations.

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Bank of Canada Releases New DeFi Lending Report

On April 2, 2026, the Bank of Canada published a staff analytical paper entitled “DeFi Lending: Returns, Leverage, and Liquidation Risk.” The paper examines transaction data from Aave V3, the largest DeFi lending protocol, to assess the potential benefits and risks of decentralized lending in practice. Specifically, the paper (i) evaluates Aave’s revenue model, (ii) investigates recursive leverage behavior among borrowers, and (iii) analyzes liquidation patterns.

Notably, the paper finds that DeFi lending “is viable in a technical and operational sense” and that Aave V3 “operates continuously, transparently, and with minimal overhead, demonstrating the potential of protocol-based credit markets” (p. 28).

Notable and Quotable

“Similarly, the software-developer protections that Clarity incorporates would ensure that the technology powering digital finance remains open, secure and domestically developed. American corporations and entrepreneurs poised to engineer the industry’s underlying infrastructure must understand their legal obligations. Clarity would deliver long-sought confidence and gives the next generation a green light to build.”

— Treasury Secretary Scott Bessent in an op-ed for the Wall Street Journal

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As we shared in the last DeFi Debrief, on March 16, 2026, the Congressional Research Service (CRS) released a report entitled “An Overview of Decentralized Finance (DeFi).” The report provides Congress with a high-level overview of DeFi, focusing on two primary areas: defining DeFi and regulatory policy considerations.

This week, the DEF team is doing the DeFi Debrief a little bit differently, focusing the CRS report’s findings and potential implications:

Defining DeFi

The report outlines the core components of the DeFi ecosystem, including cryptocurrencies, smart contracts, and oracles. It describes common DeFi applications, such as staking and validation, mixers, decentralized exchanges (DEXs), lending protocols, and yield farming. The report also compares DeFi systems with traditional financial (TradFi) infrastructure, highlighting key differences in design and functionality. For a more detailed analysis of DeFi use cases, see DEF’s one-pager here.

Regulatory Policy Issues

The report examines potential regulatory approaches and broader policy implications for DeFi, highlighting both the technological innovation enabled by decentralized systems and the regulatory challenges associated with it. Key concerns include: (1) legal uncertainty, (2) potential regulatory arbitrage, and (3) compliance considerations.

With Congress considering legislation on digital asset market structure, this CRS report may help shape how policymakers understand and approach the DeFi ecosystem. Overall, the report is a balanced, technical analysis that frames DeFi as both a technological innovation (enabling automated, permissionless financial services), while also highlighting how its disintermediated architecture and evolving legal status make it a unique regulatory challenge.

However, a few aspects of the report could benefit from additional clarification.

• First, the report adopts several ambiguous definitions for core concepts in the DeFi ecosystem. For example, it states that “[DeFi] generally refers to the use of cryptocurrency and certain programs that create a financial system with little, if any, use for intermediaries” (p. 1). This statement could benefit from additional nuance. By definition, DeFi protocols are designed to operate without intermediaries *entirely*. In practice, users execute transactions on DeFi protocols through public smart contracts deployed on permissionless blockchains rather than through centralized institutions such as banks, brokers, or exchanges.

• The report also raises concerns about illicit finance risks in DeFi without context related to risks better characterized as cybersecurity risks or risks inherent in all finance. The report says that onchain transactions “may make it easier to conduct and conceal illicit financial activity” and notes that tools such as “mixers or blockchain analytics have developed to obscure and track transactions” (p. 2). Further, the report notes that “whether and how Congress decides to legislate DeFi could have implications for how much illicit financial activity occurs on DeFi platforms” (p. 17) and continue to emphasize that the DeFi space carries a high risk of illicit finance activity (pp. 19–20).

However, as illustrated in a previous DEF blog, while illicit activity does occur in the digital asset ecosystem, it represents only a small fraction of overall financial crime. For example, both the U.S. Department of the Treasury’s 2024 National Risk Assessment and the July 2025 President’s Working Group Report find that most illicit finance risks continue to occur within the traditional financial system. Moreover, as explained in detail in our previous paper, the current Bank Secrecy Act (BSA) is broken and applying one-size-fits-all anti-money laundering (AML) requirements to DeFi participants would be technically infeasible and inefficient.

You can read the full CRS report here.

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Notable and Quotable

“Digital assets can offer many benefits to both banks and their customers. For example, payment stablecoins and tokenized deposits hold the potential to enable faster and cheaper payments. . . Bank FinTech partnerships can provide a channel for banks of all sizes to access new technologies. They can promote a level playing field by allowing community banks to compete with larger banks that have more resources to invest in their own technologies.”

– Randall Guynn (Director, Division of Supervision and Regulation, Federal Reserve), testifying before the House Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence on “Innovation at the Speed of Markets: How Regulators Keep Pace with Technology”

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On March 24, 2026, the Commodity Futures Trading Commission (CFTC) Chairman Michael Selig announced the formation of an Innovation Task Force aimed at advancing a clear regulatory framework for innovators developing novel products and technologies. The initiative will focus on: (i) digital assets and blockchain technology; (ii) artificial intelligence and autonomous systems; and (iii) prediction markets and event contracts.

The Innovation Task Force will coordinate with the Securities and Exchange Commission (SEC) and its Crypto Task Force on innovation initiatives. CTFC Senior Advisor Michael J. Passalacqua will lead the Innovation Task Force.

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Congressional Research Service Releases a DeFi Overview

On March 16, 2026, the Congressional Research Service (CRS) published a comprehensive primer on the decentralized finance (DeFi) ecosystem and its policy implications. The report provides an overview of DeFi technology and markets, covering key applications such as decentralized exchanges, lending protocols, and mixers. It also examines key regulatory considerations, including the treatment of DeFi in digital asset market structure legislation and the challenges of applying traditional Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) requirements—designed for intermediated financial systems—to noncustodial, peer-to-peer software protocols.

Notably, the report cites DEF’s August 2025 coalition letter to Congress in both footnote 77 (p. 15) and footnote 100 (p. 19), highlighting the importance of including robust developer protections in market structure legislation. You can read the full CRS primer here.

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HFSC Hosts Tokenization Hearing

On March 25, 2026, the U.S. House Committee on Financial Services (HFSC) held a hearing entitled “Tokenization and the Future of Securities: Modernizing Our Capital Markets.” The discussion focused on how blockchain technology can bring traditional financial assets on-chain and reshape U.S. capital markets.

While lawmakers debated how regulation should evolve, there was broad recognition that blockchain-based systems can reduce certain risks while raising novel legal questions. Blockchain Association CEO Summer Mersinger explained the benefits of DeFi:

“When we talk about DeFi, what we’re talking about is permissionless, non-custodial, non-discretionary code. So this is a technology that’s going to improve the markets. It’s going to bring faster settlement. It’s going to reduce costs, because there’s not the intermediaries, and just like with electronic trading, these technologies can operate side by side in a regulated space, and eventually you’ll see the evolution of the markets going to the more efficient system, such as using DeFi for these trades so I think what you’ll see is more efficiency from them, lower costs, and really less risk because of the settlement time.”

A recording of the full hearing is available here.

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DEF Publishes 2026 Update on U.S. v. Storm

On March 24, 2026, DEF published a blog on the latest developments in U.S. v. Storm, the case against Roman Storm in the Southern District of New York. Following last year’s trial, which resulted in a hung jury and a mistrial on the money laundering and sanctions evasion conspiracy charges, prosecutors have indicated their intent to retry the case. The case continues to serve as a key test of potential criminal liability for software developers, and DEF has closely tracked developments since the trial began last year.

Our latest blog expands on the most important updates shaping how courts may analyze issues like intent, control, and responsibility in permissionless systems. Read more here for the full breakdown.

DeFi Dictionary

Security matters in crypto. Our Word of the Week is what proves a transaction is yours and hasn’t been altered.

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Notable and Quotable

“We can’t discuss tokenization without talking about decentralization in the innovation happening in DeFi. … The lack of the intermediation poses some really novel legal and regulatory questions for trading and custody of securities. It really, in some ways, spins on its head, kind of our framework with which we’ve thought through this over the past 100 years.”

—Representative Bryan Steil (R-WI) during the HFSC hearing: “Tokenization and the Future of Securities: Modernizing Our Capital Markets.”

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On March 17, 2026, the Securities and Exchange Commission (SEC) issued an “interpretation clarifying how federal securities laws apply to certain crypto assets and related transactions.” The Commodity Futures Trading Commission (CFTC) joined the SEC, outlining how the CFTC and its staff will administer the Commodity Exchange Act consistent with the guidance. Chair Atkins’ speech on the same day the interpretation was released also previews what is to come in an SEC innovation exemption: a fit-for-purpose “startup exemption,” a “fundraising exemption,” and an “investment contract safe harbor” from the definition of “security” for certain crypto assets.

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The interpretation (1) provides a token taxonomy, (2) addresses how a non-security crypto asset may become subject to (or may cease to be subject to) an investment contract, and (3) clarifies the application of the federal securities laws to protocol mining, protocol staking, the wrapping of a non-security crypto asset, and airdrops. Notably, the interpretation clarifies that “certain crypto asset disseminations known as ‘airdrops’ do not involve an ‘investment of money’ under the Howey test.” It also describes four “asset categories that are not deemed securities: digital commodities, digital collectibles, digital tools, and payment stablecoins under the GENIUS Act.”

You can read the fact sheet here and view the full interpretive release here.

DEF and Beba Drop SEC Airdrop Challenge

On March 16, 2026, DEF and Texas-based apparel company Beba LLC voluntarily dismissed our lawsuit challenging the SEC’s treatment of free airdrops under former SEC Chair Gary Gensler without prejudice, allowing the suit to be refiled in the future. Originally filed in 2024, the case argued that the SEC had effectively treated free airdrops as securities transactions through enforcement actions rather than formal rulemaking with public notice and comment, violating the Administrative Procedures Act.

In deciding to drop the case, DEF and Beba cited the recent shifts in the SEC’s approach, including statements from Commissioner Peirce and the work of the Crypto Task Force. The SEC’s March 17 interpretation explicitly clarified that token airdrops are not considered securities transactions, providing greater regulatory clarity for the industry.

SEC Commissioner Peirce Provides Update on Innovation Exemption

On March 12, 2026, SEC Commissioner Hester Peirce provided an update on the agency’s “innovation exemption” during remarks at the SEC’s Investor Advisory Committee (IAC) meeting. In her speech, Commissioner Peirce explained that SEC staff are evaluating a potential exemption that would facilitate limited trading of tokenized securities and allow firms to experiment with blockchain technology while regulators assess how existing securities laws might apply.

Commissioner Peirce’s remarks reinforce SEC Chairman Paul Atkins’s previous statements, emphasizing that the exemption is intended to create a controlled environment where companies can test tokenized securities and new trading infrastructure while the SEC gathers information to develop a long-term regulatory framework.

A link to the full speech transcript is available here.

To learn more about innovation exemptions and safe harbors, explore DEF’s blog posts:

• Chair Atkins’ Proposed DeFi Innovation Exemption

• Decoding the SEC’s New Rulemaking Agenda: Potential DeFi Impacts

• SEC and CFTC Host Crypto Regulatory Harmonization Roundtable

• SEC Speech Discusses Potential Innovation Exemption for DeFi

CFTC Staff Issues Phantom a No-Action Letter

On March 17, 2026, the CFTC’s Market Participants Division issued a no-action letter to Phantom Technologies Inc. (Phantom), a self-custodial digital assets software provider, stating that staff will not recommend enforcement action against Phantom for failing to register as an introducing broker. The relief is limited to Phantom’s non-custodial interface that connects users to CFTC-regulated derivatives and does not constitute a formal agency ruling. As a no-action position that applies only to Phantom, other market participants would need to seek similar relief individually rather than rely on it as broadly applicable guidance. This is an important step forward by the CFTC and a positive signal of what is to come.

As DEF explained in a previous blog, no-action letters can serve as a critical bridge, offering builders a degree of legal certainty pending comprehensive regulatory frameworks. For detailed analysis on what no-action letters are and why they are important, please see our blog here.

Notably, on March 20, 2026, Ayana Dow, DEF’s senior counsel, joined Blockstories to discuss why the no-action letter matters, saying “what makes this significant is that the CFTC is implicitly acknowledging that a software provider in a similar situation can offer access to CFTC-regulated derivatives trading without being treated as a regulated intermediary.”

Related Media:

• Blockstories: CoinShares Expands Into Onchain Asset Management, Brings Multi-Asset Portfolios Onchain (March 20, 2026)

DEF Co-Signs Open Letter to U.S. Universities on DeFi Education

On March 18, 2026, DEF joined 1inch and industry partners in urging U.S. higher education institutions to further integrate digital assets, blockchain, and DeFi into business and legal curriculum.

You can read the letter here.

Related Media:

• DeFi leaders push for more decentralized finance in US university curricula – The Block

DEF’s Executive Director Speaks at DC Blockchain Summit

On March 17, 2026, DEF’s Executive Director & Chief Legal Officer Amanda Tuminelli moderated a conversation about how to regulate DeFi without killing innovation, featuring Stani Kulechov, Rep. Warren Davidson (R-OH), and Evan Sui.

During the panel discussion, the speakers explored DeFi as an alternative to traditional finance, highlighted ongoing challenges within the space, and emphasized the need for these issues to be addressed through the market structure bill.

DEF Holds House Briefing on Promoting Innovation in Blockchain Development Act

On March 18, 2026, DEF held a congressional staff briefing on the Promoting Innovation in Blockchain Development Act (PIBDA) of 2026 for staff whose members serve on the House Judiciary and Financial Services Committees. Michael Mosier, former Acting Director of FinCEN, joined DEF’s Amanda Tuminelli for the discussion.

During the briefing, the speakers broke down PIBDA, explaining its significance and how it aims to address the misapplication of Section 1960 to software developers.

Read the DEF one-pager for this bipartisan bill here, and you can find a detailed analysis here on what PIBDA does and why it matters for software developers.

DeFi Dictionary

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Notable and Quotable

“For most of history, if two people wanted to transact, they could simply do so. Today, the financial system assumes an intermediary has to approve it. DeFi flips that back around—it allows people to transact directly, securely, and transparently without asking permission.”

—Representative Warren Davidson at DC Blockchain Summit