More than 110 cryptocurrency companies and investors have delivered an ultimatum to the Senate Banking and Agriculture Committees, threatening to withdraw support for landmark market structure legislation unless explicit protections for blockchain developers are codified into federal law.
The coalition—featuring industry heavyweights Coinbase, Kraken, Ripple, a16z, Uniswap Labs, and the Solana Foundation—represents a calculated gambit amid Congress’s most ambitious crypto regulatory push since digital assets entered mainstream consciousness. Their demand centers on preventing developers from being misclassified as intermediaries under antiquated financial regulations, a prospect that would subject software creators to compliance burdens originally designed for traditional brokers and dealers.
Crypto giants leverage regulatory momentum to shield developers from broker-dealer compliance burdens through strategic legislative pressure.
This timing proves particularly strategic. The House recently passed the CLARITY Act, establishing federal regulatory frameworks with defined SEC and CFTC jurisdictions, while the Senate Banking Committee released discussion drafts expanding market structure clarifications. The Agriculture Committee is expected to follow with complementary CFTC-focused proposals, setting the stage for legislative negotiations that could reshape crypto’s regulatory landscape. The Senate’s proposal includes provisions for a micro-innovation sandbox that would allow eligible firms to test innovative blockchain activities under relaxed regulatory requirements.
The industry’s concern extends beyond theoretical regulatory overreach. Electric Capital data reveals a stark trend: U.S. open-source blockchain developers declined from 25% of the global pool in 2021 to just 18% in 2025. This developer exodus reflects mounting regulatory uncertainty that threatens America’s position in blockchain innovation—a migration to friendlier jurisdictions that would make any tech brain drain blush. Traditional finance’s regulatory oversight creates complexity that DeFi aims to eliminate through smart contracts and autonomous transaction execution.
The coalition’s ultimatum carries considerable weight given the bipartisan momentum behind crypto legislation. The CLARITY Act’s House passage demonstrates political viability, yet industry leaders understand that Senate deliberations will likely blend multiple proposals through protracted negotiations requiring strategic compromise. The GENIUS Act has already established federal frameworks for stablecoins with overwhelming congressional support, demonstrating lawmakers’ capacity for comprehensive digital asset regulation.
Their position fundamentally frames developer protections as a litmus test for balanced regulation. Without explicit safeguards allowing developers to build, publish, and maintain blockchain networks without undue compliance burdens, the coalition signals they’ll abandon support for otherwise beneficial market structure legislation.
The irony proves palpable: Congress seeks to provide regulatory clarity while potentially driving away the very innovators who make the technology function. Whether senators recognize that protecting developers serves both innovation and their own legislative ambitions remains the pivotal question as negotiations unfold.
