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 /
article-image

Lissandra Melo/Shutterstock and Adobe modified by Blockworks

share

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.

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.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Flying_Tulip.png

Research

Flying Tulip's perpetual put option provides real principal protection, but investors must pay a valuation premium today for products that have to be built over the next 24 months. This structure works best as a stablecoin substitute where the put allows continuous monitoring—accept opportunity cost in exchange for asymmetric upside if the team executes on its ambitious cross-collateral architecture.

article-image

As flows consolidate and volatility fades, finding edge now means knowing which games are still worth playing

article-image

Value distribution came to $1.9 billion distributed in Q3, though total revenues have yet to beat 2021 heights

article-image

MegaETH public sale auction ends tomorrow, and the free money machine has attracted people who like free money

article-image

With tBTC under the hood, Acre abstracts bridging and converts non-BTC rewards to bitcoin

article-image

Accountable is also eyeing mid-November for mainnet launch

article-image

“Adjusted for size, I think it may be the most successful ETP launch of all time,” Bitwise CIO Matt Hougan says