Crypto Giants Warn Senate: No Market Structure Bill Without Developer Protections

A powerful coalition of 114 crypto companies and tech lobbying groups has issued a warning to the U.S. Senate Banking Committee: they will oppose the upcoming crypto market structure bill unless it includes clear legal protections for software developers and non-custodial service providers.

In a joint letter coordinated by the DeFi Education Fund, industry leaders stressed the importance of shielding developers from criminal liability.

“We […] speak to Congress with one voice: provide robust, nationwide protections for software developers and non-custodial service providers in market structure legislation,” the letter states. “Without such protections, we cannot support a market structure bill.”

Who Signed the Letter?

The letter was signed by major crypto players including Coinbase, Kraken, Grayscale, Andreessen Horowitz, Paradigm, DCG, Solana Labs, and Uniswap Labs. It also received backing from lobbying groups such as the Chamber of Progress, funded by Amazon, Apple, Google, and Uber.

A source familiar with the initiative said the push came after concerns that some Senate Democrats might add language to the bill implicating developers of software later used for money laundering or sanctions evasion.

“Preventing developers from facing such criminal liability is an issue that fully unites the industry,” the source emphasized.

House vs. Senate Approaches

The letter praised the House of Representatives for passing the CLARITY Act, which carved out decentralized finance (DeFi) and peer-to-peer blockchain transactions from heavy regulation. However, industry leaders insist the Senate must go further by explicitly shielding developers.

Miller Whitehouse-Levine, CEO of the Solana Policy Institute, said:

“The leaders of the crypto industry are speaking with one voice on a fundamental principle: public blockchains are neutral infrastructure just like the internet, roads, or bridges. The U.S. doesn’t criminalize the engineers who build our highways when someone uses them to commit a crime. Congress must apply that same principle to digital infrastructure and include comprehensive protections for developers and non-custodial service providers in any market structure legislation.”

Target: U.S. Code 1960

Specifically, the coalition is urging the Senate to clarify that software developers cannot be prosecuted as money transmitters under U.S. code 1960. They also want any federal protections to override conflicting state laws.

The demand follows the conviction of Roman Storm, co-developer of the Tornado Cash crypto-mixing protocol, under that statute. Storm was found guilty because the platform processed funds tied to illegal activity.

Interestingly, while the Trump administration has broadly taken a pro-crypto stance, the Department of Justice appeared to soften its approach weeks later. A DOJ official told crypto industry leaders it would no longer prosecute developers of “truly decentralized” peer-to-peer software that does not hold user funds.

Stronger Tone From the Industry

Despite that reassurance, today’s letter strikes a firmer tone.

“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,” the coalition wrote. “Without these explicit safeguards, the bill risks stifling innovation, undermining open-source development, and driving blockchain infrastructure development out of the United States.”