DEF & 110+ Partners Submit Coalition Letter on Developer Protections in Market Structure

DeFi Education Fund
5 hours ago
4 min read

Dear Members of the Senate Committee on Banking and Committee on Agriculture:

We are united in our commitment to protecting the software developers and non-custodial service providers building our digital financial future. We, the undersigned organizations—115 crypto builders, investors, and advocates—speak to Congress with one voice: provide robust, nationwide protections for software developers and non-custodial service providers in market structure legislation. Without such protections, we cannot support a market structure bill.

As much-needed digital asset law develops in the United States, it is critical that legislation recognizes and preserves the historical protections afforded to open-source software development, and ensures that software developers and non-custodial service providers who create, support, and enable access to decentralized networks are not forced into unworkable regulatory categories designed for the traditional, intermediated financial world. The United States’ historically welcoming approach to software development has allowed it to lead the world in developing cutting-edge technology over the last half-century, from the earliest internet technologies to the emergence of AI. For that leadership to continue into the digital financial age, and for the United States to become the “crypto capital of the world,” market structure legislation must treat blockchain technology as neutral infrastructure and include comprehensive protections for the developers building it and the non-custodial service providers enabling users to access it.

Absent legislation, the United States will continue to cede software development ground due to regulatory uncertainty. “The total share of open-source software developers in the United States dropped from 25% in 2021 to 18% in 2025” – a trend largely attributed to the lack of regulatory certainty for software development (1). As the President’s Working Group Report on Digital Assets recently stated, “reversing the decline of blockchain development in the United States is central to the goal of making America the crypto capital of the world.” (2)

We are grateful that the House and the Senate included the Blockchain Regulatory Certainty Act and Keep Your Coins Act in their respective drafts of market structure legislation. These bills recognize the distinctions between intermediated finance and decentralized networks, and protect important American values such as the right to self-custody and freedom to engage in peer-to-peer transactions. Both are essential to making the United States a hub for blockchain innovation. However, additional critical clarifications are needed, as detailed below, and these protections must also be federally preemptive to avoid a patchwork of 50-state laws.

To create an environment in which innovators across America can confidently and safely build financial infrastructure, the final version of market structure legislation must include explicit federal protections for blockchain infrastructure developers and non-custodial service providers. These protections must make explicit that no individual or entity is subject to regulation solely for engaging in activities that are core to creating, developing, publishing, and maintaining blockchain networks, nor for enabling users to access such networks via software interfaces while maintaining custody of their own funds. Legislation should not regulate developers differently based on the type of software they create when they are not acting as intermediaries and don’t have control or custody of user assets. Legislation must shield developers from being misclassified or prosecuted as operators of money transmitting businesses under 18 U.S.C. § 1960. To ensure legal clarity and nationwide consistency, federal legislation must preempt conflicting state laws. Without these explicit safeguards, the bill risks stifling innovation, undermining open-source development, and driving blockchain infrastructure development out of the United States.

Protecting software developers is a firmly bipartisan issue, as demonstrated by decades of support for open-source software and the bipartisan supermajority passage of the CLARITY Act, when 294 members voted in favor of protecting software developers and non-custodial service providers. While this broad support is encouraging, we urge the Senate to improve on the developer protections in the CLARITY Act, and deliver clear, nationwide protections that will allow developers to innovate with confidence in the United States. By doing so, the Senate can build on this bipartisan momentum and solidify American leadership in software development.

We thank you for your hard work and continued leadership in providing clear rules for the digital assets industry.

Respectfully Signed,

DeFi Education Fund

Alabama Blockchain Alliance

Bitcoin Policy Institute

Blockchain Association

Cedar Innovation Foundation

Chamber of Progress

Crypto Council for Innovation

Decentralization Research Center

Florida Blockchain Business Association

Michigan Blockchain Council

Minnesota Blockchain Initiative

New Jersey Innovation and Technology Alliance

North American Blockchain Association

North Carolina Blockchain and AI Initiative

North Dakota Blockchain Council

Solana Policy Institute

South Carolina Emerging Tech Assoc Inc.

South Dakota Blockchain Institute

Stand with Crypto

Texas Blockchain Council

The Digital Chamber

Virginia Blockchain Council

Wisconsin Blockchain Business Council

a16z crypto

Aerodrome

Aleo Network Foundation

Anchorage Digital

Anagram Ltd.

Anza

Aptos Labs

Aragon

Avalanche Foundation

Aztec Labs

BitmineBlockaid

Blockchain Capital

Castle Island Ventures

Chainlink Labs

Code Inc.

Coinbase

Dapper Labs

Decibel Foundation

DeFi Development Corp

Delphi Ventures

Digital Currency Group

Digital Securities Initiative

Douro Labs

Dragonfly

DoubleZero Foundation

dYdX Labs

Electric Capital

Electric Coin Co.

Ethena Labs

Etherealize

FalconX

Futuretechga.org

Galaxy Digital

Gauntlet Networks

Grayscale Investments

GSR

Halliday

Hedera Hashgraph, LLC

Hekaton LLC

IoTeX

Jito Labs

Jump Crypto

Kraken

Krypton Labs

Ledger

Lido Labs Foundation

Magic Eden US

Miden

Monad Foundation

Morpho

Multicoin Capital

Mysten Labs

New Arrow Ventures

North Island Ventures

Offchain Labs

Orca Creative

Pantera Capital Management

Paradigm

Paxos

Phantom Technologies, Inc.

Plume Network

Polygon Labs

Predicate

Remaster, Inc.

Ripple

RockawayX

Securitize

Sei Labs

Solana Foundation

Solana Labs

StableLab

Superstate

Surus

Tally

The Rage

The Venture Dept.

Toku

TransCrypts

TriStar Technology Council

Uniswap Foundation

Uniswap Labs

Variant

J.W. Verret, Assoc. Prof., George Mason Antonin Scalia Law School

Veda

Velodrome

Wintermute

Wormhole Foundation

1inch

1: Total Developer Share by Country, Report by Electric Capital, www.developerreport.com/geography.

2: President’s Working Group Report on Digital Asset Markets, Strengthening American Leadership in Digital Financial Technology, 25 (July 30, 2025), https://shorturl.at/Mzaw2.