A coalition of 112 companies and interest groups from the cryptocurrency industry has sent a strong message to the Senate’s committees, stating that their support for legislation on market structure depends on the inclusion of robust protective measures for software developers. This ultimatum has significant implications for the future of blockchain development in the United States.
The coalition, which includes prominent players such as Coinbase, Octopus, and A16Z, has presented a unified front in their demand for explicit safeguards for software developers. In a letter orchestrated by the DeFi Education Fund, the industry leaders argue that without these protections, they cannot support the legislation, framing it as a non-negotiable term for their confirmation.
The Industry’s Concerns
The letter highlights the impracticality of including open-source software creators in regulatory frameworks designed for traditional financial intermediaries. This, the signatories argue, is a fundamental misclassification that could stifle development and innovation in the industry. Citing data, the letter notes that the US share of open-source software developers has dropped from 25% in 2021 to a significantly lower percentage in 2025, indicating a brain drain that could have severe consequences for the industry’s growth.
The recent conviction of Tornado Cash developer Roman Storm has further reinforced the industry’s concerns. Storm was found guilty of conspiracy for inspection of money laundering, operation of a non-licensed money station, and violation of sanction laws, despite not controlling the protocol or user funds. This conviction has sent a chilling message to the developer community, who fear that they could be held liable for the actions of third parties using their neutral open-source technology.
Requirements for Protection
The coalition’s demands for protective measures are both technical and extensive. They call on legislators to protect individuals exclusively from regulation for the creation, publication, or maintenance of blockchain code. The letter states, “In order to create an environment in which innovators can build with confidence and certainty financial infrastructure all over America, the final version of the market structure legislation must contain explicit federal protection for blockchain infrastructure developers and non-customer-specific service providers.”
Crucially, the coalition is seeking federal preemption to prevent a contradictory patchwork of state laws and an explicit carve-out to prevent developers from being misclassified as non-licensed money transmitters under Law 18, § 1960. This would provide a safe harbor for developers, allowing them to innovate without fear of prosecution or undue regulatory burden.
In conclusion, the cryptocurrency industry has issued a clear ultimatum to the Senate: include robust protective measures for software developers, or risk losing the support of the industry. As the US continues to navigate the complexities of blockchain regulation, it is essential that policymakers take the concerns of the industry seriously and work towards creating a framework that promotes innovation and growth. For more information on this developing story, visit https://crypto.news/crypto-lobby-issues-ultimatum-to-senate-on-developer-safeguards/.
