The DeFi Education Fund (DEF) has been actively involved in legal and regulatory matters concerning the cryptocurrency industry. In November, DEF filed an amicus brief in a case involving the IRS and Coinbase, arguing for privacy rights in cryptocurrency transactions. DEF also submitted a comment letter to the U.S. Treasury Department and the IRS, opposing their proposed “broker” rulemaking that would classify DeFi protocols and frontends as “brokers”.
DEF’s Legal Involvement in Harper v. Internal Revenue Service
- DEF’s Amicus Brief: DEF filed an amicus brief in the Harper v. Internal Revenue Service case, which revolves around a “John Doe” summons the IRS sent to Coinbase. The summons resulted in the collection of information for about 8.9 million transactions by 14,355 Americans over a three-year period. DEF argues for a limited application of the “third-party doctrine” to protect users’ privacy.
DEF’s Opposition to the Proposed “Broker” Rulemaking
- DEF’s Comment Letter: DEF submitted a comment letter to the U.S. Treasury Department and the IRS, opposing their proposed “broker” rulemaking. DEF argues that the proposed regulations violate the Fourth Amendment’s prohibition on warrantless searches and seizures of a person’s papers and effects. The rulemaking would classify DeFi protocols and frontends as “brokers”, which DEF believes would stretch the definition of “broker” beyond constitutional limits.
DEF’s Media Engagement
- DEF’s Media Presence: DEF has been active in the media, with op-eds and articles published on CoinDesk and The Block. These pieces discuss DEF’s opposition to the proposed “broker” rulemaking and its involvement in the Harper v. Internal Revenue Service case.
DEF’s Advocacy for Cryptocurrency Privacy
- DEF’s Privacy Advocacy: DEF’s legal involvement and media engagement demonstrate its advocacy for privacy rights in cryptocurrency transactions. DEF argues that the government’s collection of information that can tie a citizen’s identity to a wallet address allows for constant and persistent surveillance over a vast array of users’ past and future transactions.
DEF’s Opposition to the Expansion of the “Broker” Definition
- DEF’s Stance on “Broker” Definition: DEF opposes the proposed expansion of the “broker” definition to include DeFi protocols and frontends. DEF argues that this would require information collection and reporting by individuals and entities incapable of collecting that information, endanger the personal data of millions of Americans, confuse taxpayers, stress government resources, stifle innovation, and cripple American businesses and competitiveness.
- Understanding the Legal Landscape: Stakeholders in the cryptocurrency industry should familiarize themselves with the legal and regulatory landscape, including cases like Harper v. Internal Revenue Service and proposed regulations like the “broker” rulemaking.
- Engaging with Regulatory Bodies: Cryptocurrency entities should consider engaging with regulatory bodies, either directly or through advocacy groups like DEF, to voice their concerns and provide input on proposed regulations.
- Advocating for Privacy Rights: Cryptocurrency users and entities should advocate for privacy rights in cryptocurrency transactions, given the potential for government surveillance.
- Monitoring DEF’s Activities: Stakeholders should monitor DEF’s activities, as its legal involvement and advocacy work could have significant implications for the cryptocurrency industry.