112 Crypto Firms Call on Senate to Protect Developers in Market Structure Bill

A coalition of 112 crypto companies, investors, and advocacy groups has called on the U.S. Senate to include clear protections for software developers and non-custodial service providers in its upcoming market structure legislation. The group emphasized that without such safeguards, it cannot support the bill.

In a letter addressed to key Senate committees, the industry warned that developers and non-custodial actors risk being wrongly categorized as financial intermediaries under outdated laws. Such a move, they argue, would stifle innovation in the decentralized finance sector and unfairly expose neutral infrastructure builders to legal risks.

The coalition includes some of the most prominent names in the industry, such as major exchanges, blockchain labs, venture firms, and advocacy groups. Together, they form one of the largest lobbying efforts yet to influence digital asset legislation.

One of the central concerns raised is the sharp decline in U.S. participation in blockchain development. In recent years, the share of American open-source developers in the global blockchain ecosystem has dropped significantly. Industry leaders believe this trend is tied directly to regulatory uncertainty, pushing talent and innovation overseas.

The coalition also expressed alarm over the risk of misapplied criminal liability. Developers who create open-source code, particularly those not involved in custody of assets, could face prosecution as if they were operating money transmitting businesses. Recent high-profile legal cases against developers have amplified these fears, underscoring the urgent need for legislative clarity.

Lawmakers are expected to move the market structure bill through Senate committees in the coming months, to reach a floor vote before the end of the year. While the House has already advanced legislation containing some carve-outs for decentralized finance and peer-to-peer transactions, the coalition urges the Senate to expand on those protections.

At the heart of the issue is whether software developers should be treated as responsible parties for how their creations are used. Industry leaders argue that developers of decentralized systems are comparable to builders of public infrastructure, such as the internet or roads. They provide tools that can be used for countless purposes, but they should not be held liable for misuse by bad actors.

For the crypto sector, the Senate’s handling of this issue could define the trajectory of American blockchain innovation for years to come. If protections are added, the U.S. may strengthen its role as a hub for digital asset development. Without them, companies warn that developers will face increased risk, innovation will be chilled, and the country will continue losing ground to international competitors.

The unified stance from such a wide range of crypto organizations highlights how crucial this debate has become. As Congress weighs how to regulate digital assets, the question of whether to shield developers could prove decisive for the future of decentralized technology in the United States.