DeFi Education Fund launches nonprofit that accepts tax-deductible donations

One of Washington's largest lobbying groups focused on decentralized finance is debuting the DeFi Education Foundation, a nonprofit geared toward educating lawmakers as they work on drafting rules for the cryptocurrency industry at large.

The DeFi Education Fund (DEF) announced the creation of that foundation on Wednesday. The group said the nonprofit will be a "net-positive for many DEF donors."

"This is a critical moment for digital asset law and policy, and DEF's important work for the future of DeFi is only possible because of the generosity of our friends and supporters -- that's why we are very excited to offer the possibility of donating with charitable giving incentives through DeFi Education Foundation," said Jennifer Rosenthal, chief communications officer at DeFi Education Fund in an emailed statement.

Donations directly made to charity can "avoid capital gains tax and give you a fair market value deduction," said Jason Schwartz, tax partner at Cahill NXT, in an attached link to the DEF's statement.

How DeFi and software developers should be regulated has come up frequently among lawmakers, regulators, and in the courts. DEF has urged Senate Republicans, who are working on a bill to regulate the crypto industry as a whole, to carefully consider how it regulate DeFi. The group also pressed the Securities and Exchange Commission to create a safe harbor for certain blockchain apps as the agency embarks on "Project Crypto" in an effort to update its rules.

DeFi has also been challenged in the courts following a jury's decision last week to find Tornado Cash creator Roman Storm guilty of conspiracy to operate an unlicensed money transmitting business. DEF had taken the position that software developers of "noncustodial peer-to-peer protocols" do not have control or have custody of users' assets, so they cannot be money transmitting businesses.

The new foundation will be led by DeFi Education Fund Executive Director Tuminelli, Multicoin Capital Greg Xethalis, and Arktouros PLLC Co-Founder Michael Mosier.