Crypto Journalist

Amin Ayan

Crypto Journalist

Amin Ayan

About Author

Amin Ayan is a crypto journalist with over four years of experience in the industry. He has contributed to leading publications such as Cryptonews, Investing.com, 99Bitcoins, and 24/7 Wall St. He has…

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August 2, 2025

The DeFi Education Fund (DEF), a policy advocacy group backed by an early Uniswap grant, has called on the US Senate Banking Committee to take a more measured approach to DeFi regulation.

In a formal response to the draft Responsible Financial Innovation Act of 2025 (RFIA), DEF and a coalition of top crypto firms outlined a framework they believe can safeguard innovation without undermining national security or consumer protections.

The response was co-signed by a16z Crypto, Jito Labs, Jump Crypto, Paradigm, Multicoin Capital, Solana Policy Institute, Uniswap Foundation, Uniswap Labs, and Variant Fund.

DEF Calls for Clear DeFi Rules, Developer Protections in Senate Response

The DEF’s response pushes for four key pillars, including distinguishing between DeFi developers and intermediaries, defining which entities are required to register with federal authorities, setting decentralization criteria, and ensuring technology-neutral rulemaking.

These suggestions come amid the Senate’s call for public feedback on the RFIA, which builds on the earlier CLARITY Act.

Lawmakers say they aim to strike a balance between market growth and financial oversight, but DEF argues that a nuanced understanding of decentralized systems is essential.

One of the more urgent issues raised in the letter involves the ongoing federal case against Tornado Cash developer Roman Storm.

DEF criticizes current FinCEN guidance used in the prosecution, warning that treating non-custodial software code as a financial service sets a dangerous precedent.

“Software that does not take custody or control should not be regulated as an intermediary,” DEF states, urging legislative clarification.

The coalition also emphasized the need for federal preemption to override conflicting state laws.

According to DEF, without preemption, well-funded traditional financial players could exploit state-level loopholes to target DeFi developers and suppress emerging competition.

Andreessen Horowitz Flags Gaps in Draft Crypto Bill

On Thursday, Andreessen Horowitz (a16z) also urged US lawmakers to revisit and revise the draft crypto regulation bill, warning that the current proposal could open legal loopholes and weaken investor protections.

While the draft seeks to clarify the regulatory landscape for digital assets, a16z argues that the framework as written poses legal and structural risks, especially around the treatment of “ancillary assets.”

Ancillary assets refer to digital tokens sold alongside investment contracts, typically without providing buyers with equity, dividends, or governance rights.

a16z said using this category as the foundation for new legislation “without significant modifications” is problematic.

The firm believes this structure contradicts the Howey test, which is the longstanding legal standard for determining whether an asset qualifies as a security under U.S. law.

“Rewriting Howey,” the letter stated, “would depart from settled law and endanger investor protections.”

Instead, a16z supports the CLARITY Act’s narrower definition of “digital commodities” and recommends codifying a control-based decentralization model.

This would assess whether any party retains unilateral control, operational, financial, or governance, over a blockchain system.

According to the firm, decentralization should mark the point at which an asset transitions from a security to a commodity.

Binance founder and former CEO Changpeng Zhao has urged national governments to explore the use of artificial intelligence tools, particularly large language models (LLMs), to simplify their legal systems.

In a July 10 post on X, Zhao argued that AI could play a key role in making legal codes more understandable and accessible to everyday citizens.

According to him, many countries have accumulated layers of complex, conflicting laws over time that legal professionals often shape through patchwork amendments.

Due to this, the current legal systems have become “gigantic, patched, added, and often intentionally made complex.”

Zhao pointed out that this has made it nearly impossible for non-lawyers to fully comprehend their rights and obligations.

However, he believes that this could change with the advent of LLMs.

Large language models are advanced AI systems like OpenAI’s ChatGPT that could be trained on extensive legal text. This would allow these tools to read, analyze, and rewrite dense legal documents into simplified formats.

As a result, these AIs could detect inconsistencies, streamline clauses, and interpret technical language, which could help make the law more accessible to everyday users.

AI won’t replace lawyers

Despite his enthusiasm, Zhao clarified that AI should not be seen as a substitute for human lawyers.

Instead, he positioned these technologies as assistants that could handle routine tasks while freeing up legal professionals to focus on more complex, high-stakes work.

According to him:

“There could be a 1000 companies building spaceships vs only a couple now. We can test more drugs to cure cancer. Flying cars… All of them need tremendous amounts of legal work.”

Meanwhile, market observers cautioned that while LLMs offer tremendous utility, they have flaws.

Current iterations still face challenges such as hallucinations or situations when the AI generates incorrect or misleading information. They argued that this reinforces the continued need for legal professionals who can interpret, verify, and contextualize the law.

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Ahead of an important week for digital assets legislation, Stand With Crypto (SWC) and over 60 other industry firms sent a letter urging House lawmakers to champion clear regulations for the industry and unlock its potential.

Industry Coalition Pushes For CLARITY Act Approval

On Monday, advocacy group Stand With Crypto, alongside 65 other firms and groups, sent a letter to the US House of Representatives urging lawmakers to support the bipartisan Digital Asset Market Clarity (CLARITY) Act of 2025 as the US approaches a “pivotal crossroad.”

Excerpt from the letter to members of the House of Representatives. Source: SWC

The industry coalition argued that digital assets continue to reshape the global economy, despite some efforts to “politicize crypto legislation,” adding that the US risks falling behind unless pro-crypto policies that fully embrace blockchain technology are quickly adopted.

There are already signs of U.S. crypto leadership slipping. We cannot afford to let inaction and uncertainty jeopardize our ability to secure Americaʼs economic future. Above all else the U.S. crypto industry needs market structure — which ensures there are clear rules of the road and provides the regulatory clarity that developers, users, and advocates need to continue innovating.

The letter explains that digital assets are “providing a foundation for a more inclusive, transparent, and secure digital economy,” and “opening doors for economic opportunity, innovation, and financial empowerment on a scale weʼve never seen before.”

As such, crypto developers require clear guidance and safeguards to continue building blockchain systems, with standards for transparency, security, and accountability, and where users can control their digital assets.

The lack of standardized rules has hindered institutional adoption, innovation, and pushed talent and businesses to more industry-friendly jurisdictions outside the US. Nonetheless, passing the long-awaited market structure bill would address these issues, the crypto coalition argues.

House Lawmakers Prepare For ‘Crypto Week’

Notably, SWC’s letter comes ahead of the highly anticipated “Crypto Week,” which will see the review of three key legislations during the week of July 14 to 18, including the GENIUS Act and CLARITY Act.

As reported by Bitcoinist, House Financial Services Committee Chair French Hill, House Agriculture Committee Chair Glenn Thompson, and Speaker Mike Johnson announced the upcoming discussion on rules on stablecoins, market structure, and central bank digital currency as part of Congress’s efforts to make America the crypto capital of the world.

Chairman Thompson affirmed that “it will soon be time for the House to deliver for the American people and send CLARITY to the Senate. I thank House Leadership for recognizing the urgent need for CLARITY to cement American leadership in the digital asset space.”

The bipartisan bill was introduced on May 29 by Chairman Hill, aiming to establish a regulatory framework for crypto assets and provide the long-awaited clarity and protection for the industry.

If passed, the legislation will assign clear roles and responsibilities to the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC), which would “not only enable and empower developers to innovate, but also protect consumers through choice, foster greater participation in the blockchain economy, and strengthen national security.”

Nearly a month ago, the bill passed its two committee markups, but it still needs to pass the full House vote and the Senate before heading to President Donald Trump’s desk.

 However, its path to approval has been uncertain, as House Democrats have heavily criticized the bill, and some lawmakers have pushed to merge it with the GENIUS Act, making next week’s debate a pivotal moment for the legislation.

Bitcoin (BTC) trades at $108,442 in the one-week chart. Source: BTCUSDT on TradingView

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Tim Alper

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Tim Alper

About Author

Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked…

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May 24, 2025

Lawmakers close to Lee Jae-myung, the frontrunner in the South Korean presidential elections, have called for Seoul to steal a march on Washington by fast-tracking the rollout of a KRW stablecoin.

The South Korean media outlet Edaily quoted Min Byoung-dug, a lawmaker for the Democratic Party and the chairman of the party’s Digital Asset Committee, as stating that stablecoins could soon become an industry on an equal footing with AI or semiconductors. Min said:

“South Korean is an internet powerhouse. We need to take the lead in institutionalizing stablecoins before US dollar-based stablecoins become firmly established. That is the only way we can secure a sure position in the global battle for stablecoin hegemony.”

KRW Stablecoin Rollout: The Time Is Now

Min added that he thought the potential for stablecoin adoption in the payments space was “limitless.” He explained:

“We should not just sit back and watch it grow into a powerful new future industry on the scale of AI or semiconductors.”

Min is a close Lee ally and an open advocate of crypto regulation reform. He has also previously called for tax parity between South Korean stock traders and crypto investors.

Lee has repeatedly promised to launch a state-backed KRW stablecoin in response to the rapid rise of USD-pegged coins like USDT and USD Coin (USDC).

The frontrunner, who leads his closest rival Kim Moon-soo (People Power Party) in the polls by almost 10%, has called for Seoul to “enter the stablecoin market quickly.”

Lee has warned that delaying the launch of such a coin could lead to further capital flight from the country.

Min echoed Lee’s calls, telling EDaily that Seoul “must expedite the institutionalization of stablecoins.”

He explained that South Korea “should not fall behind as the use of stablecoins rapidly increases, particularly in the United States.”

USDT, USDC Dominance

Min noted the fact that USDT and USDC “account for 90% of the stablecoin market in the United States.”

He also claimed that USD-pegged coins “are already being used in some parts of Korea, such as Dongdaemun Market, where many foreign payments are made.”

Min’s comments about Dongdaegmun Market, Seoul’s biggest clothing and textiles market, may be seen as contentious.

Posters on popular South Korean crypto forums last year claimed that “mass USDT adoption” was underway at Dongdaemun, with Chinese buyers particularly keen on the coin.

However, Dongaemun traders have told both Cryptonews.com and South Korean media outlets that cash, not crypto, is still king at the market.

Regardless, Min said that rapid adoption at home and overseas means Seoul risks being left out in the cold.

He said that if USDT and USDC continue to gain popularity worldwide, the space a won-based stablecoin could fill “will inevitably diminish.”

Could Lawmakers Act Before June 3 Elections?

Min claimed that a won-based stablecoin could gain global attention and drive up global demand for won-related assets, such as the government bonds underpinning a KRW stablecoin.

The lawmaker said that fans of South Korean webtoons (web-based comics) could be among the first overseas users. Readers may use a won-based stablecoin to buy webtoons, Min said.

Min added that he is already pushing for the National Assembly to approve stablecoin legislation.

The DP has a large majority in the house going into the elections. And with the nation essentially rudderless following the impeachment earlier this year of former President Yoon Suk-yeol, the party may yet decide to push ahead with such a bill before the June 3 elections.

Min has already unveiled a private member’s bill named the Basic Act on Digital Assets, prepared with the aid of industry experts.

The lawmaker said of the draft law: “I plan to submit the bill to the National Assembly after another review.”

Coinbase CEO Brian Armstrong has called on lawmakers to support stablecoin legislation that allows consumers to earn interest directly from their digital dollar holdings, framing it as a “win-win” for consumers, global financial access, and long-term US economic strength.

In a detailed post published on March 31, Armstrong argued that the next phase of stablecoin innovation must include “onchain interest” — a mechanism that would allow holders of fiat-backed stablecoins to receive a share of the yield generated by underlying reserve assets, such as short-term US Treasuries.

While banks currently offer interest-bearing accounts under long-standing regulatory exemptions, stablecoin issuers face legal uncertainty that prevents them from sharing interest with users without potentially triggering securities laws.

According to Armstrong:

“Consumers deserve a bigger piece of the pie. Opening the door for onchain interest will force us all to up our game for the ultimate benefit of consumers, and will keep this innovation onshore.”

Fairer financial future

Stablecoins have achieved widespread adoption as a digital representation of fiat currencies, but Armstrong said they have yet to unlock their full potential for everyday users.

He noted that while the average Federal Funds rate in 2024 was 4.75%, most consumers earned less than 0.5% — and in many cases as little as 0.01% — on their savings accounts. That gap, coupled with inflation near 3%, resulted in a real loss of purchasing power for ordinary Americans.

Armstrong said:

“Onchain interest democratizes access to market-rate yields, giving regular people a fair shot at maintaining and growing their wealth.”

He also pointed to the transformative impact stablecoins could have globally. Billions of people in underbanked regions are currently locked out of US dollar access or are subject to volatile local currencies.

Armstrong added that by allowing interest-bearing stablecoins, the US could help onboard a new wave of global users into an instant, transparent, and accessible financial system with just an internet connection.

He wrote:

“No branch visits, no excessive overdraft or remittance fees. It’s equal financial access for everyone, powered by crypto rails.”

Strategic advantage for the US economy

Armstrong further emphasized that allowing onchain interest for stablecoins brings a host of potential benefits for US economic policy.

Stablecoin issuers already rank among the largest buyers of US Treasuries — surpassing many foreign governments — and are helping to draw more global demand back to dollar-denominated assets.

He argued that if consumers worldwide could earn interest on US stablecoins, the resulting increase in adoption would boost Treasury demand, reinforce dollar dominance, and stimulate economic activity through higher consumer spending and investment.

According to Armstrong:

“More yield in consumers’ hands means more spending, saving, investing — fueling economic growth in all local economies where stablecoins are held.”

However, Armstrong warned that regulatory inaction could cause the US to miss out on trillions of dollars in global financial flows.

He urged Congress to act swiftly and ensure that new stablecoin legislation includes clear legal provisions allowing regulated issuers to deliver onchain interest without triggering complex disclosure requirements or securities classifications.

Armstrong said:

“With a pro-crypto administration and Congress actively working on stablecoin regulation, we have a unique opportunity. We can either modernize the system to benefit consumers — or protect an outdated one that enriches middlemen.”

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Leading financial industry groups have urged President Donald Trump’s administration to roll back federal policies they say have restricted US banks from engaging in digital asset markets and warned that regulatory overreach is hampering American leadership in financial innovation.

In a letter sent to David Sacks, Special Advisor for Artificial Intelligence and Crypto and chair of the President’s Working Group on Digital Asset Markets, the groups called for the immediate rescission or revision of policies imposed by federal banking agencies under the previous administration.

According to the letter:

“These policies have made it exceedingly difficult for banks to engage in digital asset-related activities, despite their clear legal authority to do so.”

They also pressed the White House to include key regulators — the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) — in the working group’s efforts to reshape the U.S. digital asset framework.

US banks sidelined

The letter, signed by the Bank Policy Institute, American Bankers Association, Securities Industry and Financial Markets Association, and other financial organizations, argued that restrictive policies have left US banks lagging behind international competitors in the digital asset sector.

The banking organizations singled out several regulatory actions issued under the Biden administration, including:

• Federal Reserve’s SR 22-6 policy on crypto-asset engagement
• OCC’s Interpretive Letter 1179 restricting crypto custody
• FDIC’s FIL-16-2022 notification requirement for crypto activities
• Joint agency statements warning against crypto-asset risks

The letter stated:

“The United States will not be able to achieve a leadership position in digital assets and financial technology under the status quo.”

The banking groups said the first step in advancing that goal is rolling back Biden-era restrictions, which they argued have created uncertainty and discouraged US financial institutions from participating in the sector.

The organizations signaled their intent to provide detailed regulatory and legislative proposals to help US banks regain competitiveness in the global digital asset economy. They also requested a meeting with Sacks and the working group to discuss the next steps.

Inclusion in Crypto Task Force

The groups also urged Sacks to expand the President’s Working Group to include banking regulators, citing their influence over financial markets. The FDIC, OCC, and Federal Reserve were not included in the current task force despite their oversight of banks seeking to engage with digital assets.

The letter pointed to FDIC Acting Chairman Travis Hill’s recent remarks, in which he acknowledged that the agency’s approach to crypto had led to a perception that the FDIC was “closed for business” regarding blockchain and digital asset-related activities.

Beyond banking regulators, the groups suggested that the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) — both divisions of the Treasury Department — should also be included in digital asset discussions, given their role in regulating financial crime and sanctions compliance.

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