DEF Submits Amicus Brief in Tornado Cash Case What happened? In August of last year, the U.S. Department of Justice (DOJ) indicted Roman Storm and Roman Semenov, the developers of the Ethereum-based smart contract protocol Tornado Cash. The DOJ alleged three wide-ranging conspiracies in the Indictment, including money laundering, operating an unlicensed money transmitting business, and violations of the International Emergency Economic Powers Act (IEEPA). On Friday of last week, DEF submitted its amicus brief in support of Storm’s Motion to Dismiss the Indictment. DEF’s position is simple: t ..read more

On Tuesday, Adewale Adeyemo, Deputy Secretary of the Department of Treasury, testified before the Senate Committee on Banking, Housing, and Urban Affairs concerning the Treasury’s efforts to counter illicit finance, terrorism, and sanctions evasion. Although the hearing touched on a variety of national security matters, one recurring topic of Deputy Secretary Adeyemo’s remarks was Hamas’ use of cryptocurrency.  Deputy Secretary Adeyemo began the hearing by requesting “additional tools and authorities… to mitigate the risks” in the cryptocurrency ecosystem. Because of the Treasury’s ..read more

Here’s what the DeFi Education Fund (DEF) has been up to in March 2024. If you have any questions or would like to learn more about a specific activity, please do not hesitate to reach out at contact@defieducationfund.org. DEF & Beba Sue the SEC In March, DEF and Beba, a Waco, Texas-based apparel company, sued the SEC. Our suit seeks relief on two fronts:  A declaration that $BEBA tokens are not themselves investment contracts and a free airdrop of a $BEBA token is not a securities transaction; and An order that the SEC violated the Administrative Procedure Act (“APA”) when ..read more

Commissioner Peirce’s Remarks at SEC Speaks What happened? Last Tuesday, Securities and Exchange Commission (SEC) Commissioner Hester Peirce delivered remarks at SEC Speaks program during which she revisited the notion of the SEC's regulatory "secret garden," detailing the maze of staff guidance related to digital assets that broadly shapes securities laws without undergoing formal rule-making processes. “Nobody can challenge these diktats because they are not final agency action, but compliance is mandatory for an entity wishing to avoid SEC delays, denials, and enforcement and examination s ..read more

DEF and Beba Sue the SEC What happened? Last Monday, DEF and Beba, an apparel company, sued the SEC. Beba airdropped $BEBA tokens as part of its marketing efforts and now seeks a court order declaring that: (1) its free airdrop was not a securities transaction and (2) $BEBA tokens are not investment contracts. In addition, DEF and Beba argue that the SEC’s behind-closed-doors adoption of its policy that nearly all digital assets and digital asset transactions are securities breached the agency’s notice-and-comment rulemaking obligations under the Administrative Procedures Act.  What doe ..read more

The partial denial of Coinbase’s motion for judgment on the pleadings and the default judgment issued in SEC v. Wahi have rightly captured crypto’s attention recently, as have the SEC’s cases against Kraken and Binance. The importance of a court judgment depends in part on the specific facts and circumstances around its issuance: what stage of the litigation it comes in, what type of motion it is responsive to, whether the case has been defended, etc. Below, we break down why the sky isn’t falling – it’s just another day in the rapidly shifting world of digital assets law.  Each of the ex ..read more

Before we get into this week’s DEF Weekly, you might have seen exciting news from us on Monday. We are happy to share that DEF and Beba, a Waco, Texas-based apparel company, filed a pre-enforcement suit challenging the SEC’s regulation by enforcement approach to crypto and their policy that free airdrops are securities transactions. We will talk more about this suit in the coming days and weeks, but in the meantime check out our blog post to get a sense of what it all means.  Judge Denies Genesis and Gemini Motion to Dismiss; Genesis and Gemini Settle  What happened? On March 15, Jud ..read more

On March 25, 2024, DEF and Beba, a Waco, Texas-based apparel company, ,,sued the SEC. We seek a court order that the SEC unlawfully adopted its “nearly all ,,tokens are securities” policy—never publicly defined yet wantonly enforced—and that $BEBA token free airdrops are not securities transactions.  In this post, we explore why we were forced to take this action, summarize our claims, and discuss why we think this case is important. Why are DEF and Beba bringing this suit? This case is about reigning in unchecked agency power and overreach. The crypto community has been under attack for ..read more

SEC Commissioners’ Raging Dissent on Enforcement Action What happened? On March 5th, the Securities and Exchange Commission (SEC) issued a cease-and-desist Order settling allegations that ShapeShift AG (ShapeShift) acted as an unregistered securities “dealer” in connection with its digital asset trading platform. According to the Order, from 2014 to 2021, ShapeShift operated an online platform where it acted as a market maker, buying and selling digital assets from and to users. The SEC claimed that ShapeShift “effected exchanges from its own inventory, serving as the customer’s counterparty i ..read more

What happened?  On December 22, 2023, the ,,BarnBridge decentralized autonomous organization (DAO) and its ,,founders agreed to cease-and-desist orders and settled charges brought by the Securities and Exchange Commission (SEC) for violations of U.S. securities laws. The settlements ,,included a nearly $1.5 million disgorgement from the DAO’s sale of digital assets, an order to stop offering “unregistered securities,” to stop “making payments for the development, maintenance, and use of smart contracts that comprise the BarnBridge website, application, and protocols,” to “c ..read more