A coalition of 114 crypto companies and tech lobby groups—representing what they describe as the largest crypto advocacy effort ever assembled in Washington—has descended upon the Senate with all the subtlety of a digital battering ram, demanding explicit federal protections for software developers before they’ll throw their considerable weight behind any crypto market structure legislation.
The heavyweight roster reads like a who’s who of digital finance royalty: Coinbase, Kraken, Grayscale, Andreessen Horowitz, Paradigm, DCG, Solana Labs, and Uniswap Labs, bolstered by traditional tech lobbying powerhouses like Chamber of Progress (which counts Amazon, Apple, Google, and Uber among its benefactors).
Their collective ultimatum to the Senate Banking and Agriculture Committees carries the unmistakable scent of hardball politics wrapped in regulatory rhetoric.
At the coalition’s core lies a deceptively simple demand: shield software developers and non-custodial service providers from criminal liability when their creations are misused for money laundering or sanctions evasion.
The industry’s elegant solution: absolve creators when their digital tools become instruments of financial crime.
The industry argues that antiquated regulations threaten to misclassify open-source developers as financial intermediaries—a regulatory sleight of hand that could criminalize code creation itself. The coalition warns this regulatory approach fundamentally misunderstands the distinction between traditional financial systems and decentralized open-source development models.
The stakes, according to industry data, extend beyond Washington’s usual regulatory theater. The U.S. share of open-source blockchain developers has plummeted from 25% in 2021 to 18% in 2025, a brain drain the coalition attributes directly to regulatory uncertainty.
Whether this exodus reflects genuine innovation flight or strategic positioning remains an open question, but the numbers provide convenient ammunition for legislative pressure campaigns. Meanwhile, the smart contract vulnerabilities that plagued the industry throughout 2024 continue to highlight the complex technical challenges facing developers in this rapidly evolving space.
The coalition’s wish list encompasses federal preemption of state laws, explicit protections against money transmission misclassification, and safeguards for self-custody peer-to-peer transactions. The House’s passage of the CLARITY Act provides a roadmap, having successfully excluded decentralized finance and peer-to-peer blockchain transactions from heavy regulatory oversight.
Current legislative efforts like the Blockchain Regulatory Certainty Act and Keep Your Coins Act apparently fall short of industry expectations—though one might wonder if any regulatory framework would satisfy an industry built on decentralization principles.
The implicit threat underlying this coordinated advocacy effort is unmistakable: provide thorough developer protections or watch the crypto industry withdraw support for broader market structure legislation.
It’s a high-stakes gambit that transforms software developers into legislative hostages while positioning the United States’ “crypto capital” status as collateral damage in Washington’s regulatory chess match.
