Crypto industry coalition presses Senate for developer protections

Over 100 crypto firms and advocates urge Congress to shield open-source builders and non-custodial providers

by Blockworks /

August 27, 2025 10:45 am

Lissandra Melo/Shutterstock and Adobe modified by Blockworks

This article was generated with the assistance of AI and reviewed by editor Jeffrey Albus before publication.

A coalition of 112 crypto organizations, including Coinbase, a16z crypto, Paradigm and the Blockchain Association, has sent a joint letter to the Senate Banking and Agriculture Committees urging lawmakers to include explicit protections for software developers and non-custodial service providers in upcoming digital asset market structure legislation.

The letter, dated August 27, was addressed to Senators Tim Scott, John Boozman, Elizabeth Warren and Amy Klobuchar, reflecting the bipartisan focus of ongoing negotiations.

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The signatories argue that without nationwide protections, developers risk being misclassified as money transmitters under federal law, potentially stifling open-source innovation. The letter claims the share of open-source software developers in the U.S. has fallen from 25% in 2021 to 18% in 2025, attributing the drop to regulatory uncertainty.

It also cites the July 2025 President’s Working Group Report on Digital Asset Markets, which stressed the importance of reversing this decline to maintain U.S. leadership in blockchain technology.

The coalition welcomed the inclusion of the Blockchain Regulatory Certainty Act and Keep Your Coins Act in draft legislation, but called for additional clarifications and federal preemption to avoid a patchwork of state laws. The groups warn that, absent such measures, blockchain infrastructure development may increasingly migrate overseas.

The campaign builds on the bipartisan passage of the CLARITY Act in the House, where 294 members supported protections for developers and non-custodial providers. Advocates say that expanding those safeguards is necessary for the US to retain its position as a global leader in financial technology, echoing similar concerns raised in the passage of FIT21 in 2024.

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