A growing coalition of defenders DEFI has urged US legislators to revise a key regulatory proposal to better protect developers in the decentralized finance sector. The DEFI EDUCATION FUND (DEF), an eminent Pro-Crypto lobbying group, published a letter on Friday providing that the law on financial innovation responsible for 2025 (RFA) is adjusted to avoid stifling innovation while retaining financial guarantees (1). The letter, signed by DEF members, notably the Crypto A16Z, the Laboratoires Uniswap and the Paradigm, underlined the need for a “neutral” approach which protects the cryptographic developers from regulations traditionally applied to intermediaries (1).
The DEF recommendations include the guarantee that the FRG does not unjustly load the innovation of decentralized finances (DEFI) while responding to the risks linked to illegal financial activity. The group also stressed the importance of self-toilet rights for individuals, describing them as “essential” in the Defi ecosystem (1). In addition, the letter has urged federal regulators to revise the existing directives of the financial network of financial crimes (Fincen), in particular in response to legal actions against developers of non -guardian tools such as Tornado Cash (1).
The DEF also called for federal pre -emption of conflicting regulations at the state level, warning that traditional financial institutions could exploit fragmented legal frameworks to remove competition. This concern stems from the fear that certain measures to apply the law at the level of the state can be less motivated by consumer protection and more by efforts to hinder the growing influence of DEFI (1).
In parallel, A16Z Crypto submitted its own comments to the Senate Banking Committee, echoing some of the DEF concerns while adding the emphasis on investor protections. The firm criticized the bill for having potentially created dangerous regulatory gaps, in particular with regard to the classification of “auxiliary assets”. A16Z warned that the proposed redefinition of these assets could conflict with existing American securities laws, including the Howy test, potentially allowing initiates to bypass surveillance during the distribution of tokens (1).
The senatorial banking committee, which is responsible for shaping the FRG, invited industry comments to refine the bill. The chairman of the Tim Scott committee and other members have actively committed to stakeholders to ensure that final legislation supports innovation while confirming consumer protections and financial stability (1). This collaborative approach reflects recognition by the committee of the need for thoughtful regulations on a rapidly evolving market.
The DEFI sector has reached a market size of $ 141 billion, according to DEF declarations, and is considered an essential element of the wider digital asset ecosystem. The thrust of the Lobby group highlights the continuous tension between regulatory clarity and innovation, stakeholders arguing for balanced policies that do not dissuade technological progress or investor confidence (1).
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Source: (1) DEFI Education Fund (
