In what may represent the most coordinated industry pushback against federal regulators since the crypto sector’s inception, a coalition of 112 firms—spanning everything from blue-chip exchanges like Coinbase and Kraken to venture juggernauts like a16z—delivered an ultimatum to Senate banking officials on August 27, 2025, that fundamentally boiled down to this: protect our developers from prosecutorial overreach, or watch your carefully crafted market structure bill die a legislative death.
The coalition, orchestrated by the DeFi Education Fund and featuring heavyweights like Ripple, Grayscale, Uniswab Labs, and Solana Labs, represents the largest crypto advocacy effort in history. Their demands center on securing “robust, nationwide protections” for blockchain developers and non-custodial service providers—essentially preventing these innovators from being misclassified as traditional financial intermediaries subject to banking or brokerage regulations.
The industry’s unprecedented united front demands federal shield laws for developers—or threatens to torpedo comprehensive crypto legislation entirely.
The timing proves particularly strategic, as the Senate Banking Committee’s draft Digital Asset Market Structure Bill attempts to establish thorough crypto regulation while positioning the SEC as primary overseer of “ancillary assets” (with the CFTC maintaining consultative roles). This differs markedly from the House-passed CLARITY Act, which already included some developer safeguards the coalition now demands be preserved and expanded. The bill permits banks to engage in comprehensive digital asset activities including custody, trading, lending, and payment services under existing banking laws. The industry’s push for clarity reflects growing frustration with the previous regulation by enforcement approach that failed to provide adequate guidance for legitimate business operations.
At the heart of their argument lies a fundamental principle: open-source blockchain developers shouldn’t face criminal liability under money transmission statutes like 18 U.S.C. § 1960 for how third parties might misuse their software tools. The coalition draws parallels to neutral infrastructure—roads don’t get prosecuted when criminals use them for getaway routes, after all. Industry concerns intensified following the prosecution of Tornado Cash developer Roman Storm, which highlighted the urgent need for clearer legal protections.
The coalition particularly seeks federal preemption to eliminate the patchwork of conflicting state laws that currently create regulatory uncertainty for developers. Without these explicit protections, they’ve made clear that industry support for the entire legislative package evaporates—a threat that carries substantial weight given the signatories’ collective market influence.
Whether Senate officials will capitulate to these demands remains uncertain, but the unified front represents a calculated gamble: force lawmakers to choose between passing crypto legislation without industry backing or incorporating developer protections that traditionalist regulators might view as overly permissive. The stakes couldn’t be higher for both sides.