The Avalanche Policy Coalition hosted a panel discussion titled "What's To Come," focusing on the need for a robust regulatory framework governing crypto validators and decentralized finance (DeFi). The session, spotlighted by the Digital Chamber, brought together notable industry figures including Lee Schneider and Jolie Kahn to address one of the most pressing questions in digital asset regulation: how to distinguish between infrastructure providers and intermediaries.

Lee Schneider, a veteran digital asset lawyer who has served as general counsel at Ava Labs, emphasized that drawing a clear line between infrastructure and intermediaries is essential for effective regulation. The distinction carries concrete consequences: if validators are classified as intermediaries rather than neutral infrastructure, they could face registration requirements, compliance obligations, and liability exposures that many argue are incompatible with their technical role of ordering and finalizing transactions. The panel aimed to bridge persistent gaps in understanding the respective roles of validators, protocol developers, and service providers within decentralized networks—roles that existing regulatory frameworks were not designed to accommodate.

Jolie Kahn contributed additional perspectives on regulatory clarity, reinforcing the panel's broader goal of advocating for what participants termed "smart regulation" of crypto validators. The Digital Chamber, an advocacy organization representing digital asset industry participants, has consistently pushed for policies that it argues would foster innovation while providing regulatory certainty.

The discussion comes at a time of intensifying regulatory scrutiny of the cryptocurrency sector. In the United States, the SEC has brought enforcement actions against multiple DeFi-related protocols and entities, while the CFTC has asserted jurisdiction over certain digital assets as commodities, creating overlapping and sometimes conflicting regulatory signals. Regulators in multiple jurisdictions are grappling with how to apply existing securities, commodities, and banking laws to decentralized protocols and the entities that operate or interact with them. The distinction between infrastructure—such as blockchain validators that process transactions—and intermediaries that custody assets or facilitate trades on behalf of users has become a central point of debate, with outcomes likely to influence where DeFi development concentrates and how validator operators structure their businesses.

Avalanche is a layer-1 blockchain platform designed to support decentralized applications and custom blockchain networks through its subnet architecture. The Avalanche Policy Coalition serves as a policy and advocacy initiative associated with the Avalanche ecosystem, engaging with lawmakers and regulators on issues affecting decentralized technologies.

Panel participants suggested that regulatory developments emerging from dialogues of this nature could significantly shape the operational landscape for DeFi projects going forward. The ongoing conversation underscores the tension between compliance obligations and the permissionless ethos of decentralized finance, as stakeholders seek frameworks that accommodate both regulatory expectations and the technical realities of blockchain infrastructure.

The full session is available here. The Digital Chamber shared details from the discussion on X.