On The Brink with Castle Island - Amanda Tuminelli on the DeFi Education Fund (EP.463)

Episode Date: October 23, 2023

Amanda Tuminelli of The DeFi Education Fund joins the podcast. In this episode we discuss: Amanda's background and path to joining The DeFi Education Fund The IRS "broker" rulemaking process and its potential impact on DeFi The SEC's "Exchange" rulemaking process DEF's amicus briefs on SEC vs. Coinbase Patent trolls in the DeFi ecosystem Links to content discussed on this episode: protectdefi.org IPR Petition (Patent Case) "Exchange" Rulemaking Comment Letter  DEF's Amicus Brief in SEC v. Coinbase To learn more about The DeFi Education Fund visit: defieducationfund.org/

Today on the podcast, I sat down with Amanda Tuminelli, the chief legal officer of the DFI Education Fund. The DFI education fund is a nonpartisan research and advocacy group that's working to explain the benefits of DFI. In this episode, we discussed a number of the Hutt policy issues that the group is working on, including the IRS broker provision, which stemmed from the infrastructure bill that was quite controversial at the time. We also talked about the SEC's proposed rule change to the Exchange Act that would impact a great number of DFI protocols as well as trad-fi firms. We talked about various court cases that are underway where the Defy Education Fund is submitting amicus briefs. And we also talked about these new patent troll cases that are impacting the defy ecosystem. It's a ton of information in this podcast. I had a lot of fun

recording it. So without further ado, here's my conversation with Amanda Tuminelli, the chief legal officer of the Defy Education Fund. Matt Walsh and Nick Carter are partners at Castle Island Ventures. All of these expressed by them or the guests on this podcast are solely their opinions and do not reflect the opinions of Castle Island Ventures. Guest and host may maintain positions in the assets discussed in this podcast. You should not treat any opinion expressed by anyone on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of their personal opinion.

This podcast is for informational purposes only. Brought down by bad mortgage investments, Lehman, which has 25,000 employees, will be liquidated. The federal government loans American International Group, AIG, $85 billion. This is a different kind of market, and the Fed is asleep. The federal government is stepping into stable. Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. The Bank of England has pumped 75 billion pounds more to Britain's ailing economy with a new round of quantitative easing.

You print a couple trillion dollars and all of a sudden people start to worry. So out of this worry, we have something called the Bitcoin. Bitcoin. All right, Amanda, thanks so much for joining us today. Really excited to talk about the Defy Education Fund. So I appreciate it coming on the podcast. Thanks for having me. I would love to just start with your background in how you came to be involved in the

education fund, and maybe that's a good place to start. Sure. So I started my career at a large international law firm doing white color criminal defense. And that was always the thing that I hoped to do coming out of law school. And I spent a lot of time working on criminal cases and securities litigation cases because often they come hand in hand. So I spent six years at the firm at Deckerd, and then I clerked for a judge in a district court in Brooklyn. And then I ended up at Cobain Kim, which is another international firm that focuses on fraud and misconduct, disputes and resolutions. And while I was at Cobury and Kim, I started to represent blockchain companies and individuals who were tangled up with criminal allegations related to crypto and related securities cases

in the crypto space. And I really just fell in love with the space. I thought it presented really unique issues that were a way to address old problems in new ways. Whereas I think the securities litigation space is well trod with a lot of really talented professionals. This seems like an opportunity to focus on something new and exciting, especially as a younger lawyer in my career. That's great. And what is the stated mission of the Defy Education Fund? How do you think about the main objectives of the organization? So the Defy Education Fund is a nonprofit, nonpartisan policy group that advocates for Defy users and developers and for the benefits of Defy Education. more broadly. So we do that by educating lawmakers about the technology itself, meaning how it works, why it's beneficial, why lawmakers should care about it. And we're also very active in traditional

policy roles. We submit comment letters on proposed government rulemakings. We engage with lawmakers on proposed bill text, which was obviously very relevant this past summer. And we've also become more active in our litigation efforts since I joined in March. So in the litigation space, we're submitting amicus briefs and important precedent-setting cases, and we're also starting to think proactively about impact litigation. That's amazing. Well, there's so much to talk about. You must have a very busy job. There's probably 20 different issues that are impacting the defy landscape. I think a good place to start would actually be around the IRS broker comment period. So we did a few podcasts talking about the infrastructure bill at the time, and this is obviously the byproduct of

that in an unfortunate way. So maybe let's see. just dive into this. What are we talking about here with the broker comment period? And how is the Defi Education Fund involved in this? Very of the moment because the rulemaking comment period actually ends on the 30th. So we are submitting a comment letter that gets into all the issues we're about to talk about. And I would encourage everyone else to also submit comment letters about these issues. So the proposed rulemaking would change the definition of a broker to massively expand who counts as a broker. So looking at this from a crypto angle, the most significant change is it adds this definition of a digital asset middleman. And the people or entities included in that definition are people who provide a facilitative service or a person who ordinarily would know,

that's the classic language. The new language is, or be in a position to know the identity of a party making a transaction. And that would be in a position to know is really problematic here because it is boundaryless. And the way that the proposed regulations to find facilitative service is also really broad. So with these new definitions, the government would sweep in a whole group of people that never thought of themselves as brokers, we would never think of them as brokers, and now they would have to comply with broker information collection and reporting. So in our view, it is a de facto ban on defy because what will end up happening if the rulemaking is finalized, and that's obviously a big

if, if it's finalized in its current form, defy protocols, developers, people using the platform in certain ways might actually be considered brokers and would be considered by the government to be in a position to know information about transacting parties, but in reality, wouldn't know or actually couldn't know that information? It's so crazy. I remember when we went through this whole period around the infrastructure bill, the politicians who actually drafted the bill came to realize that this was completely unworkable to have software developers and node infrastructure providers fall under this definition of broker and have to comply with these broker regulations. and at the 11th hour, it felt like maybe we were going to get some change there.

But what is the actual process? It just got kicked over to the IRS after that bill got passed and it's on the IRS to define it. How does this actually work? So I can't tell you what actually happened behind the scenes, but what we know publicly is exactly as you said, there were members of Congress who were totally live to the issue as to how this would be problematic for crypto. So there's a great colloquy between senators, Portman and Warner, about how it was never the intention of Congress to ensnare stakers and validators within this new broker definition.

And I think it's quite clear that it was not the congressional intent to expand this so broadly. And then I think that just died. And then the IRS maybe because of recent events media related to fraud, maybe they decided this was their time. to put out this rulemaking. But I think what's really unfortunate about that is Congress signaled its intent to actually legislate in this space. And that would have been the proper channel. IRS should have allowed Congress to finish what they intended to do before they jumped in and created this unworkable framework. And what is the basis of the pushback here? When people are thinking about submitting comment letters to the IRS, what do you think are the most impactful

points to drive home? So I think the best way to position a letter is to explain why the proposed rule affects you or your company or your business in a way that makes it totally unworkable or confusing or really burdensome to comply with. So there's actually a number of letters already filed ahead of the deadline and we're expecting many more. We have a great framework set up on our website, which you can go to as a resource, it's protectdefi.org, is the site where you can actually see a sample letter that gives people an idea of what to say in their letter, what issues to raise, and there's also two tools out there. Lexpunk created an AI-assisted tool that will help you generate your letter and fight for the future also created a form letter. But I think the best letters will

focus on how these rules are unworkable or make people a broker when they never see. set out to be a broker and they don't know how to comply with it. It's really crazy because I think in a lot of these cases where there's proposed legislation or rules going into effect, you could find a situation where, okay, if this goes against us, we'll just have to comply. It'll be a higher cost to comply. But in this case, you're talking about companies that are data companies in the United States that are running Ethereum nodes just to figure out what's happening on the Ethereum blockchain. And by my interpretation, some of these companies would fall under the definition of broker. So literally all you're doing is running open source software on the network to figure out

what's happening. How are you actually supposed to comply with the broker regulations in that scenario? It's such a good question, and it's an important one. And what we're doing in our letter is we're actually going to run through the tech stack. So we're going to go through how a defy transaction actually gets implemented and go through every single layer of the tech stack and explain why that particular layer either can't or is not in a position to respond. or to collect information and report it. So exactly like you're saying, it's putting a burden on a group of people or entities

who just have no way to comply with this and it's not practical, and you're going to regulate them out of existence. Or you just push them offshore. And so we end up with every meaningful infrastructure company in the United States that is participating in open source software development around blockchains, and they end up just having to domicile their operations internationally.

It's pretty extreme. I totally agree with you. Also, if I could just add to the previous answer on what makes a good letter, I would also just add, because as you were talking, this made me think of it. The best letters also raise litigation risk for the IRS. So you want to flag issues that potentially people could sue over later. So one thing that we're thinking about with proactive impact litigation is teeing up a lawsuit if this rulemaking gets finalized. Whether we're the plaintiff or somebody else who's in a position to sue. Basically, anyone who's affected by the finalized rule could sue under the Administrative Procedure Act and mount a challenge to the finalized rule. So the best letters will also

put the IRS Treasury on notice of what they might be sued for later. So the Administrative Procedures Act is definitely one vector. And obviously, we've seen some crypto wins on the APA with a recent gray scale case versus the SEC. Is this also a First Amendment issue? Is this a protected speech type of thing for open source software developers? Do you think there's an angle there? I do think there's an angle there. I think that publishing code is a form of the exercise of free speech. I think we see those issues being raised in the tornado cash cases. I think that there is a lot of room to argue that a restriction on ability to publish code is a restriction on free speech. at something that Coin Center does a really good job explaining, and I would direct anybody to

go read what they've said about it because I think they do a great job explaining the free speech implications of publishing code. The other angle that comes to mind, I'm curious to get your take, is the major questions doctrine. So we're seeing that discussed a lot, and there's obviously proposed legislation in Congress. I have no idea how likely it is to pass or not. But this is obviously an issue that has a pretty fair amount of bipartisan support, I would say, around having a better market structured definition around digital assets. And so this is something that is at the forefront of conversation in Congress right now. Is that an angle here that could be helpful from a comment letter perspective? Yes, I think so. And I think we will be raising something similar with

major questions and Chevron deference in our letter. We raised a similar issue in our letter on the proposed exchange rulemaking, which I know we might talk about in a few minutes. But I think that the A key point here is that Congress is supposed to make laws that create sweeping change, just at a very basic level. And administrative agencies have the authorities that are given to them by Congress. So when the IRS expands the definition of broker so far beyond its statutory authority, it has basically exceeded the authority given to it by Congress, and it is no longer entitled to the deference that would be given to its own interpretation of its powers in a different context. So we are going to definitely raise the point that the IRS has exceeded its

statutory authority here, and it should have allowed or should now allow Congress to legislate, which is the role of Congress rather than the IRS. So we're going to put a link in the show notes here to call to action, and it's the 30th of October, really get those comments in. And I would say it applies to almost everyone in the crypto ecosystem. If you intend on running a node, if you intend on participating in any of these networks, you would really fall into the definition of a broker, which is crazy. The other comment period that I believe is still open is what you just said around the Exchange Act and the definition of what an exchange is. So maybe tee this one up and we'll talk about that one next. So unfortunately, the comment period is over for the exchange.

Oh, no. But we are just waiting right now. But I'll tee it up. So it was first, in March 2022, the SEC proposed to amend the definition of exchange and add to the alternative trading system definition. And there was a comment period back in 2022. It was reopened in March, 2022 was reopened in May of 2023. And we actually have put three comment letters in on this proposed amendment. So it is a similar theme as the broker rulemaking. But here, the SEC is vastly expanding the definition of an exchange to include any group of persons that makes available methods for trading or communications. And the SEC explicitly made it clear in the reopening this year that they are attempting to capture third parties who perform exchange-like

functions. So in the statute, there is no contemplation of including third parties. It is a or a group of persons or entities who is active control over a trading platform who actually maintains or controls that platform. In the reopening, the SEC is proposing to expand that to even third parties, people who just are service providers and who would never be thought of as part of the nucleus of what an exchange is. So it's similar to IRS and that the SEC is expanding this definition in such a broad way that it would sweep in defy participants, crypto participants, people who just never would have thought of themselves as exchange operators and who actually, in reality, probably don't have the control to make the changes that the SEC would want them to

if they were exchange operators. It's one of these things that obviously makes no sense in the context of crypto. I wonder if it also just makes no sense in the context of financial services, though. I'm looking at the SEC website now that has all of the comments and all of the meetings that the SEC's been having. So they've been meeting with trade web, meeting obviously with. some crypto participants like Uniswap, but meeting with Bloomberg, BondClick, market access. It seems like the list of participants in just the overall capital markets that are calling

out this rule as completely unworkable is pretty vast. Yes, absolutely. And I know that there are tradfied participants who are very concerned about the proposed rulemaking. And I think what's really disappointing is alternative trading system as a concept came about in the late 90s because new technology was developed that digitized trading. So in response to new technology, the SEC created a new rule. And here, it does not feel like the same thing is happening. We have new technology, and they're trying to shoehorn it into old definitions from the 90s. We're light years ahead of that. So it's really disappointing to not see the SEC just do their best to create a totally new rule instead of just expanding the old one. You know, I read this obviously as a non-lawyer,

but it would seem to me like any chat-based system would actually be an exchange by the definition of this. So you're having these back and forths on instant messenger, perhaps, in the trad-fi space around things like setting up bond trades, and that actually could fall within the definition of an exchange. And so if you're running one of these chat systems even, it actually just seems completely unworkable at a practical level. I totally agree with you. Traders use. communication systems all day long. And the new rule would essentially sweep all of that in and say that even just the chat provider would be considered part of an exchange such that they would have to comply with exchange-related compliance requirements. It's totally unworkable. So what happens when one of

these rules is just so unworkable? How would you actually even enforce on something like this, I guess is my follow-up question? Well, I think that's one of the problems is it doesn't give fair notice to people who might be swept into that rule and then enforced against later. But what happens, if it were to be finalized, the rulemaking gets finalized and then there's some kind of period before it gets actually enforced in theory to give people a chance to change whatever they need to change or come into compliance. And then after it's enacted, essentially put forward and finalized, then people have to start complying with it or they face liability for not doing so. So what I think we will see happen here is if exchange gets finalized or broker gets finalized in their current form,

you are going to see many different entities suing under the APA or other constitutional protections, as you mentioned, saying that these rules are arbitrary and capricious, that they're vague, they're overbroad, that they didn't give fair notice, or they didn't comply with the procedural requirements that they need to under the APA. So it's clear to me how the broker provision fell in the lap of the IRS. It was really just a failure to adequately write that infrastructure bill and the 11th hour, there wasn't enough time to get it through. But how does something like this SEC Exchange Act update actually make it through? How did we even get here? I don't know if I know the answer to that question. The real answer is the Securities at Exchange Act, the 34 Act,

has a definition of exchange. And then it, in theory, is on the SEC to regulate under that statute. So it's up to them to put out a rulemaking to define how they're going to enforce the word exchange. But as we were talking about, I think they went far beyond the statute and their authority under the statute in creating a definition that's so broad it sweeps in all of crypto. Crazy. All right. Well, let's table that one. We'll also put the link just so people can read all the comment letters. It's too bad that they're closed, although it does seem like meetings with SEC officials to discuss this topic are still happening. So if you're in a position to get a meeting with the SEC, I guess you can still say something, but the comments are unfortunately closed. And you can still

reach out to your representative. So even if you can comment to the SEC, you can absolutely reach out to your local representative, members of Congress, and explain to them why this is important to you and why it's an issue that they should be live to. That works unless you're in Stephen Lynch's district like I am, in which case your local representative really just wants to choke off. But I won't make you comment. comment on that one. Maybe switching gears a little bit here. You guys have been super active on these amicus briefs in other types of cases. So maybe for those who aren't familiar, what is an amicus brief? And then let's just dovetail into what are the hot cases that you guys are making comments on? Sure. So amicus curi means friend of the court. So what you're doing in filing

an amicus brief is assisting the court and understanding key issues in the case, whether that be how those key issues affect you or your organization individually, or whether you actually have some interest in the outcome of that particular litigation, or just explaining, which is something we do, technical background, how the technology works, just to make sure that the court is fully educated on all these issues. Very practically, parties to a case have a certain amount of pages that they can use to file motions. So taking the Coinbase case, for example, they had however many pages I think 30-something pages maybe to file their motion for judgment on the pleadings. And what we wanted to do is educate the court in that case about the actual technology for staking

and for Coinbase's wallet program or wallet software providers generally. So we used our extra pages to explain in detail that technology and why it's important to the court. So we look for cases where we think we can make that impact. we can explain how the technology works, why it's beneficial, why it's not illicit, why it's not all fraud, things that maybe parties don't have the space to do. Or also, maybe we have a different perspective on it where we just want to represent the interests of defy in the case and explain to the court that there might be collateral consequences to the court's opinion if it doesn't keep in mind this other industry. So the Coinbase case is one that's obviously a hot button case. What about

tornado cash? How are you guys thinking about that case? So there's actually three live tornado cash cases right now, two civil, one criminal. And there's the Coin Center case, which was in the district room Florida. And then there's the Van Loon case, which is where we're actually going to put in an amicus very soon. And in the Van Loon case, it's six plaintiffs who were users of tornado cash that sued the Treasury Department and OFAC, the Office of Foreign Asset Control, saying that the same thing. that OFAC put on the tornado cash smart contracts back in August 2022 were beyond OFAC's statutory authority and in violation of First Amendment and Fifth Amendment rights. So in that civil case, the plaintiffs had filed for summary judgment, as did Treasury, the court found in favor of the

government, and the case is now on appeal to the Fifth Circuit. So we will be putting in an amicus brief in the Fifth Circuit appeal. And there we want to explain why smart contracts are not property because they are not capable of being owned. We'll probably get into why the use of financial privacy enhancing tools is not illicit on its face and take the perspective of explaining to the court why the tech matters, why the tech is important, and make sure the court is creating a nuanced opinion on the tornado cash system. So while it seems like maybe the executive branch is quite hostile. And as a result, we've had some of these rules that are just unworkable. I'm actually more optimistic about the court. It actually seems like the courts are arriving at some

pretty good conclusions lately. Would you share that sentiment? A hundred percent, yes. To me, one of the reasons I'm a lawyer is because I think that we can create change through the court system, and that's why we're focused on impact litigation going forward. I think Congress is probably going to take some time to actually get legislation passed. And I don't know that we have that time to wait. So in the meantime, we can either be proactively bringing cases or educating courts where there are currently active cases and explain why the court needs to pay special attention to issues in the crypto industry. Are there any other court cases that you would call the listeners to start paying attention to other than Coinbase or Tornado Cash? I think that people should be

paying attention to what's going on in the Second Circuit. So specifically in the Southern District of New York, there are three cases that were recently decided in this space with, I'm not going to say conflicting opinions, but at least related opinions with maybe different takes on the same subject matter. So there was the Ripple case, which I think everybody has been following pretty closely for a while. There was the Terra case. And then more recently, there was Risley v. Uniswap, which involved Judge Fala, who's also the judge in the Coinbase case. So in these three cases, we have three different judges writing opinions about protocols and their interpretation of whether crypto is a security, whether secondary market sales is a

security, and try, I think, at least in Judge Fala's case in the Rizley v. Uniswap opinion, doing a really good job of creating nuance and being specific about the difference between protocols, developers, users of those protocols, and people who created tokens that are available on those protocols. So I think if that nuance, that technical specification is really important that we saw that in varying degrees across these different decisions. But the upshot is there is now some issue for the Second Circuit to decide, which means an appellate court, a court has the opportunity to potentially weigh in on some of these issues. So in the Ripple case, the SEC asked for leave to appeal immediately from their losses in that case. And Judge Torres

denied that immediate leave to appeal, but they can still appeal at the end of the case. So I think we will see the Second Circuit weigh in here, and I will certainly be paying attention to how they do that. That's fascinating. Yeah, thank goodness we have the courts. Another issue I know you guys are working hard on is around patent trolls. So I didn't even realize we already have patent trolls in the crypto space, but why not? So what's actually happening with these patent trolls these days? So there was a company called True Return Systems who patented Oracle-like technology. So the problem that they are claiming to solve in their patent is connecting off-chain data to on-chain transactions, and they're purporting to solve the problem of bloat on chain by creating this linkage.

However, they claim to have invented this in 2018. And if you know anything about the Oracle space, oracles have existed from before that, they have repos going back years prior to that. So a patent is supposed to be new technology. It's supposed to be a new invention. You can't patent something that somebody else has already put out into the world. So TRS files this patent, gets the patent in 2018. And then in 2021, they listed the patent on OpenC as an NFT, selling it for $7.5 million, and shockingly, no one bought it. And then around the same time, they sent a letter to compound, and this is in a public court filing compound wrote about this in their motion to intervene. They started sending letters to protocols, basically saying you're infringing on our patent.

and then they started suing those protocols. So they sued in the Southern District of New York, two separate cases, one against MakerDAO, one against compound protocol. That's the name defendant, compound protocol, alleging patent infringement claims. But when you name a Dow and you name a protocol, there isn't a defendant to show up. So what I imagine the strategy was here, name a defendant who can't show up, get a default judgment, and then start suing the token holders that they'll claim are associated with a, those defendants in order to enforce the judgment and get money. That's classic troll behavior.

So we saw this happening and we're not going to do anything in terms of intervening in those two cases. So what we did is petition the patent board directly to invalidate the patent. And it's called an interpartist review or IPR. So we filed our petition in September. So how does this actually work? So you filed the petition. Is there any expectation of timing or response? Yes. So normally, you file a petition, the patent inventor has 90 days to respond, and then the patent board has 90 days after that to decide whether they're going to grant your petition. And that doesn't mean you win. It just means the action is instituted, and then there's a trial, and the patent board will then hear evidence about whether the patent is new or not at the trial.

So we thought that TRS would take the 90 days they have, but they surprised us, and they filed in opposition within 30 days. So they filed their opposition on October 6th. So we've seen it. And I will avoid commenting too much on the specifics of it, but I will say that we remain very confident in our petition. And what we did in our petition was explained to the board that this was not a new invention in 2018 when the patent was filed. So now we're in that 90-day waiting period, waiting for the board to decide if they're going to grant our petition. Some of these things just seem really fishy to me. I remember when that, I think it was pool together, where there was some action brought against pool together. You'd obviously know more than I would, but it was a former

Elizabeth Warren staffer, I believe, who actually sued in that case and tried to intervene. Do you get the sense that some of these patent issues are coming from a higher place, or is this just a for-profit motivation that is compelling some of these trolls to get active and hostile, really, against defy protocols? That's a good question. I have been thinking, about it as an opportunistic profit-seeking effort, because I think here, if you're going to sue two defendants who can't show up to try to get a default judgment, and I'm speculating, but to me, the motivation is to try to get money out of the default judgments. Not sure about the higher powers question. I think that fundamentally patenting technology in this community,

especially is just incompatible with the nature of open source software. I think one of the most wonderful things about the crypto community is their dedication to open source software development and allowing other people to access codes that they can improve on it. And there's this greater community effort to better code in this area. And patents are just not compatible with the underlying ideals of open source software development. It's definitely an issue where the community needs to know more about this and rally behind it. It's happened in the Bitcoin community too, around things like Craig Wright trying to say that he has a patent over Bitcoin. And you've seen defense funds pop up in the Bitcoin space protecting core developers. But some of these

patent trolls have really made life very difficult as an open source software developer, is my impression. Yeah. And many developers are not making any money from working on the code they're working on. And they're now going to be subject to a lawsuit for potentially million of dollars when their entire intention was just to work on a project they're passionate about. So it's really unfortunate to see it happen. And it's very clear in this case that true return systems was not the first to come up with this technology. So it's just my sense of unfairness is really piqued by these actions. So obviously there's a lot going on apart from what we've already just discussed. And we've brought up some tangible examples of where folks can get involved.

and start to advocate. But there are a bunch of bills that have been introduced over the past six months. How should people be thinking about these bills? Are there bills that people should get more involved with in terms of reaching out to their local representatives? And just how should we prioritize as an industry what we should care about in terms of all these bills? That's such a good question. We were really excited that so many bills were actually heard by the Financial Services Committee, for example. So members of the House were. were active and engaged with the industry. And we actually had our first crypto bills be passed out of committee.

So the Fit 21, Fit for the 21st Century Act, actually passed out of the House committee. And that was really exciting to see. I think for people who are passionate about this or who care about the issues or who feel like these bills would affect their lives if enacted in their current form, you should reach out to representatives and let them know you care about it. And we are certainly actively engaging with lawmakers on the bill text that was proposed and how it might affect defy. And we would encourage other people to do the same thing.

And how do you guys just think about the definition of defy? Obviously, the Ethereum ecosystem has the biggest and most robust defy ecosystem, but at least from where I sit talking to entrepreneurs every day, there's all sorts of other L1 ecosystems that are trying to push forward on defy innovation. You're seeing it happen on Bitcoin. You're seeing it happen on Salana. How do you guys think about your mandate? Are you looking at other ecosystems and trying to promote Defi across those ecosystems as well?

Absolutely across ecosystems. We are not biased in favor of any one ecosystem. I think the mandate that we have is to create enough room and time for innovation to happen across the industry, across all the ecosystems you just mentioned. Our number one goal is to just allow the technology. to develop and to give people the space to continue to do that. So we are not married to one ecosystem. We don't think one is better than another. We just want to make sure that developers and users can keep having access to this tech because we think it's genuinely going to make

the world a better place to have access to this kind of technology. That's great. So maybe looping back, one thing I did not ask you about was the Tornado Cash criminal case, actually. That's obviously a hot button issue. What's happening with that case right now? It's really important because we've been talking about regulators, but now we're talking about the DOJ and we're talking about a criminal indictment. And in this case, the indictment was filed quite recently and named two of the tornado cash founders charging them with three counts of conspiracy to commit various crimes. This was in the Southern District of New York. So another case in the Southern District that might touch on crypto issues. And what's really important about this indictment, is there's a conspiracy to commit money laundering charge, a conspiracy to operate an unlicensed money transmitter business, and conspiracy to violate AEPA, which is a sanctions-related charge. And all of these charges are very important because anytime a liberty interest is at stake, it's very important. I would say that what people should care about is these founders

are accused of developing code, and that code, according to the government, was used by sanctioned individuals in North Korea generally, so sanctioned country and people associated with North Korea like the Lazarus Group. And the government's allegations are basically that bad guys used the code and then therefore the founders are responsible for that. And I think that is a slippery slope argument. And especially with the sanctions charge, if you go back and look at the indictment, the allegations are not that the founders directly solicited North Korea or actively engage with North Korea, is that the code was out there for years by this point in time,

and then North Korea used it. And there's no assertion that there was active or that the founder chose to engage with North Korea. So I think we will certainly be paying attention to it when the time comes that there's a motion to dismiss the indictment. I'm sure we will file an amicus brief to explain the nature of the tech, as we do, and also explain how there really are,

protocols where the founders no longer have control to make the changes that the DOJ might imagine that according to them they should make. I could see how that could be a slippery slope. If you use the internet analogy, does that mean that Tim Berners-Lee would be responsible for what's happening on HTTP on browsers? Or the U.S. government built Tor, and that's used by an awful lot of bad guys. So is the U.S. government liable for North Korea using Tor? That's a very slippery slope.

Exactly. I have an email client and alleged bad guys use my email client to send emails setting up a money laundering business or doing whatever they're doing, selling drugs, whatever it may be. I'm responsible for putting out the email client that runs on its own without any further engagement by me. So that's a scary proposition. Regardless of what you think of the sanctions, regardless of all the political influences, I know there's many issues here. But I think that from a developer perspective, it's a really important issue. It's difficult because from a PR perspective, the unfortunate reality is that technology is often adopted by pretty nefarious folks in the earliest days. I saw this with the internet. You probably saw this with the printing press too. You'd have people trying to exert

influence in nefarious ways, but ultimately what we should be aspiring for is just technology neutrality. Could not agree more. So Amanda, this has been great. You guys have so much on your plate. Where should we send people to learn more about what you guys are doing? And really, the call to action around the IRS broker comment period, too, we'd love to get your thoughts on where to send people. So our website has a great rundown of what we're working on at all times. We do a weekly roundup, which people can sign up for. It's also available on Twitter every week or X. But specifically with respect to broker, we set up a website, protect defy.org, which will assist you if you want to submit a comment letter to the IRS. That also links to the Lexpunks AI

tool and also fight for the futures form. So it's really a great resource if you're thinking about submitting a comment letter, but you don't know where to start. Awesome. Well, we will put the links in the show notes. This has been great. You guys are doing some awesome work on behalf of the industry. So I appreciate you coming on the podcast to talk about it. Thank you for having me. I had a great time. Thanks for listening to another episode of On the Brink with Castle Island. To find out more about Castle Island, visit castle island.V.C. To listen to all of our podcast episodes, please go to on the brink dashpodcast.com or just click on the tab in our website. Thanks for listening.