DeFi Goes to Washington — And It’s Not Here to Be Regulated Like a Bank

The DeFi Education Fund just stormed the Senate with a warning: regulate smart contracts like code, not crime.

🧠 Quick Hits

• 🏛️ DEF demands revisions to the 2025 Responsible Financial Innovation Act (RFA)
• 🔐 Developer rights + self-custody at the core of their pitch
• 💥 Non-custodial code ≠ financial intermediaries
• 🛑 State-level overreach? DEF says block it with federal preemption
• 🧑‍💻 Key signers: a16z Crypto, Uniswap Labs, Paradigm

🧨 Crypto Bill Could Backfire Without Changes

On August 2, the DeFi Education Fund (DEF) sent a loaded message to the U.S. Senate Banking Committee: Regulate finance, not free speech.

DEF warned that the current draft of the Responsible Financial Innovation Act (RFA) risks crushing open-source innovation under the same rules written for banks, brokers, and middlemen. Their position? If it’s non-custodial and decentralized, it shouldn’t be regulated like a custodian.

“DeFi developers and technology should be protected from inappropriate regulation meant for intermediaries.” — DEF Statement

🔧 What the DEF Wants Changed

1. Tech-Neutral Language So laws don’t become obsolete when blockchains evolve.
2. Explicit Right to Self-Custody Every U.S. person should be able to hold their own keys — no ifs, no buts.
3. Clear Developer Protections Writing open-source, non-custodial code shouldn’t land you in jail.
4. Federal Preemption One law to rule them all — to stop banks from lobbying state regulators into going after DeFi.

The DEF letter zeroed in on the Roman Storm / Tornado Cash case, arguing that it proves why developers need clarity: If you’re not holding user funds, you’re not a financial institution. Period.

⚖️ a16z Crypto: "Fix the Ancillary Asset Loophole"

Alongside DEF, a16z Crypto dropped a separate letter that laser-focused on a different danger zone: 🧠 The "ancillary asset" definition in the bill — sounds minor, but it’s not.

They warned it could carve out loopholes big enough to swallow securities law — particularly the Howey Test, the legal yardstick that decides whether a token is a security.

“Without tightening the definition, the bill risks undermining investor protections.” — a16z Crypto

Translation: If lawmakers don’t clean up this section, some shady projects could sneak through.

🔮 Senate Says: We’re Listening… Maybe

Senators welcomed the feedback (officially), saying it’ll help refine both the RFA and the Digital Asset Market Clarity Act of 2025. But they’ve yet to commit to:

• Developer protections
• Federal preemption
• Any overhaul of the “ancillary asset” language

So far, it’s signals, not signatures.

🧠 Why It Matters

What DEF is really fighting for is this:

• Freedom to build without fear of jail
• A national framework that can’t be bullied by state-by-state lobbying
• Self-custody as a civil right, not a technical detail

If the Senate gets it right, the U.S. could become the global hub for DeFi innovation. If not? More devs will ghost to Singapore, the Caymans, or just… go anon.

TL;DR

The DeFi Education Fund is calling on the U.S. Senate to rewrite the crypto bill — fast. They want code protected as speech, self-custody rights enshrined, and developers shielded from regulations aimed at financial middlemen. With heavyweights like a16z and Uniswap backing the push, this isn’t just lobbying — it’s a fight for the future of permissionless finance in America.