As blockchain regulations tighten, the DeFi community remains cautious of judicial rulings

The Upcoming Rehearing of the Ethereum MEV Case: U.S. Government Refuses Court Advice on DeFi Education Fund

The controversy surrounding the $25 million suspected theft case has intensified conflicts between the U.S. judicial system and the DeFi industry. Recently, the U.S. government submitted a formal objection to the court regarding the legal advice letter that the DeFi Education Fund(DEF) was about to present. This decision highlights a fundamental issue within the cryptocurrency community: where exactly are the boundaries between blockchain technology utilization and legal responsibility?

The Core of the Case and Developments

The defendants, the Perrel=Bueño brothers, are accused of conducting unauthorized transactions on the Ethereum network using automated bots (MEV mitigation strategies). Although the trial was invalidated last November due to a deadlocked jury verdict, prosecutors requested a retrial from late February to early March 2026. The brothers face charges of conspiracy to commit telegraph fraud, money laundering, and receiving stolen property, with the possibility of up to 60 years in prison if convicted.

The government’s opposition is clear: the legal advice letter from DEF contains “no new legal insights.” This refusal to accept the advice indicates how strictly regulators may approach DeFi-related cases.

Industry and Regulatory Clash

Meanwhile, advocacy groups like Coin Center have already submitted court advice supporting the defendants’ right to a fair trial. Similarly, DEF is concerned about the broader impact this case could have on DeFi development.

A particularly noteworthy aspect is the “cooling effect” that a tough prosecutorial stance could produce. According to DEF, aggressive judicial decisions amid an uncertain regulatory environment could stifle innovation among developers and project participants. In other words, even legitimate exploration of blockchain technology might be deterred if judged to be in a gray zone—this fear is becoming a reality.

Implications for the Market and Regulatory Environment

This legal process is believed to influence the long-term regulatory framework more than short-term price fluctuations. Depending on the outcome of the verdict, the legal positioning of DeFi protocols and the criteria for evaluating their mechanisms could undergo significant changes.

Industry insiders are actively debating whether this case will set an important precedent in defining the legal limits of automated trading strategies and blockchain utilization. How regulators and the developer community balance innovation with legal compliance is likely to serve as a litmus test.

Amid a complex regulatory landscape, the cryptocurrency ecosystem is approaching its next major challenge.