Research Summary
The DeFi Education Fund (DEF) has been actively involved in regulatory discussions, submitting comments on proposed rulemakings by the Financial Crimes Enforcement Network (FinCEN) and the Consumer Financial Protection Bureau (CFPB). DEF also successfully petitioned for an inter partes review of a patent filed by True Return Systems, LLC. The report also includes media mentions of DEF’s activities and perspectives.
Key Takeaways
DEF’s Response to FinCEN’s Proposed Rulemaking
- Concerns Over Vagueness: DEF submitted a comment letter to FinCEN, expressing concerns over the vagueness of the proposed rulemaking on convertible virtual currency (CVC) mixing. DEF argued that the rule’s broad definition could capture nearly all cryptocurrency transactions.
- Privacy and Development Implications: DEF also highlighted the potential negative effects of the proposed rule on U.S. user’s privacy and the development of privacy-enhancing technologies in the country.
DEF’s Comments on CFPB’s Proposed Rulemaking
- Call for Legislative Direction: DEF submitted a comment letter to the CFPB, arguing that the proposed rulemaking on digital consumer payment applications should not be finalized until Congress provides comprehensive legislative direction.
- Concerns Over Vagueness and Conflicts: DEF raised concerns over the vagueness of the proposal’s definitions and potential conflicts with other agencies’ interpretation of their authorities over the same market participants.
DEF’s Action Against True Return Systems
- Successful Petition: DEF successfully petitioned for an inter partes review of a patent filed by True Return Systems, LLC, which falsely claims to invent oracle-like technology. The Patent Trial and Appeal Board found that DEF’s argument challenging the validity of the patent is likely to succeed on the merits.
Actionable Insights
- Monitor Regulatory Developments: Stakeholders in the DeFi space should closely monitor regulatory developments, particularly proposed rulemakings by FinCEN and CFPB, as they could have significant implications for the industry.
- Engage in Regulatory Discussions: DeFi entities should consider actively engaging in regulatory discussions, following DEF’s example of submitting comment letters to regulatory bodies. This can help shape regulations in a way that is favorable to the industry.
- Understand Patent Implications: DeFi entities should understand the implications of patents in the industry, particularly those that claim to invent key technologies. DEF’s action against True Return Systems highlights the potential for patent disputes in the DeFi space.
