Research Summary
The report discusses the DeFi Education Fund’s (DEF) patent challenge against True Return Systems, LLC (TRS), DEF’s comments on the Consumer Financial Protection Bureau’s (CFPB) proposed rulemaking, and the Commodity Futures Trading Commission’s (CFTC) report on digital assets and blockchain technology.
Key Takeaways
DEF’s Patent Challenge
- Patent Trial and Appeal Board’s Decision: The Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) has granted DEF’s petition to institute an inter partes review (IPR) of TRS’s patent. The patent claims to invent oracle-like technology, which DEF argues is based on existing technology and prior art.
- Implications for the Blockchain Industry: The decision is seen as a positive step towards the revocation of a patent that wrongly claims to own oracle-like technology. This is significant for the blockchain industry, which relies heavily on open-source software development and protocol interoperability.
DEF’s Comments on CFPB’s Rulemaking
- DEF’s Concerns: DEF has submitted a comment letter on the CFPB’s proposed rulemaking, arguing that the proposal’s definitions are vague, lacks an adequate cost-benefits analysis, conflicts with other agencies’ interpretation of their own authorities, and requires careful consideration due to the novel technology involved.
- Call for Congressional Action: DEF suggests that U.S. agencies should wait for Congress to enact a comprehensive market structure bill before implementing further rules. This is to ensure sound, consistent rulemaking in alignment with legislative frameworks.
CFTC’s Report on Digital Assets and Blockchain Technology
- Report Highlights: The CFTC’s Technology Advisory Committee Subcommittee on Digital Assets and Blockchain Technology has released a report defining “DeFi”, outlining DeFi policy proposals, objectives, and risks, and suggesting possible policy and regulatory recommendations for existing and emerging DeFi projects.
- Need for Public-Private Partnership: The report emphasizes the need for a partnership between public policymakers and DeFi developers to create sensible regulation. It also highlights the complexities and nuances in ever-evolving DeFi projects, suggesting that new rules are required for these projects.
Actionable Insights
- Monitor Patent Challenges: Stakeholders in the blockchain industry should closely monitor patent challenges like the one between DEF and TRS, as the outcomes could have significant implications for the industry.
- Engage in Regulatory Discussions: Entities in the digital asset industry should actively engage in regulatory discussions and provide feedback on proposed rulemakings, as DEF has done with the CFPB’s proposal.
- Collaborate with Policymakers: DeFi developers and other stakeholders should consider collaborating with policymakers to help shape sensible regulation, as suggested by the CFTC’s report.
