The market structure bill must include explicit federal protections for software developers and non-custodial service providers to prevent misclassification as intermediaries, preserve US open-source leadership, and provide legal clarity for innovation across states.
-
Ensure federal protections for developers and non-custodial services in the market structure bill.
-
112 crypto firms and advocacy groups urged the Senate to prevent outdated intermediary classifications.
-
Electric Capital data: US share of open-source blockchain developers fell from 25% (2021) to 18% (2025).
Market structure bill protections for developers — urge action now; learn how federal clarity can preserve US crypto innovation.
What protections are industry groups asking for in the market structure bill?
Industry groups want explicit federal protections that recognize software developers and non-custodial service providers are not financial intermediaries under new market structure rules. The coalition argues that clear statutory language will prevent regulatory misclassification and keep open-source blockchain development thriving in the US.
Coinbase, Kraken, Ripple, a16z and other firms pressed the Senate to add explicit protections for developers and non-custodial services in the market structure bill.
A coalition of 112 crypto companies, investors and advocacy groups has called on the US Senate to include protections for software developers and non-custodial service providers in upcoming market structure legislation.
In a letter sent Wednesday to the Senate Banking and Agriculture Committees, the industry spoke “with one voice,” urging lawmakers to ensure developers and non-custodial actors are not misclassified as intermediaries under outdated financial rules.
“Provide robust, nationwide protections for software developers and non-custodial service providers in market structure legislation,” the letter said. “Without such protections, we cannot support a market structure bill.”
The signatories include Coinbase, Kraken, Ripple, a16z, Uniswap Labs and nearly every major US crypto lobbying group, from the Blockchain Association to the Digital Chamber. The letter emphasized the need for statutory clarity to avoid conflicting state laws and to protect innovation.
Source: DeFi Education Fund
Why does the US risk losing ground in crypto development?
Crypto advocates warned that without clear federal protections, developers may relocate or avoid contributing to open-source projects. Electric Capital data cited in the letter shows the US share of open-source blockchain developers dropped from 25% in 2021 to 18% in 2025, a decline linked to regulatory uncertainty.
Industry signatories argued that explicit protections would reduce legal risk for contributors, encourage continued US-based innovation, and align federal and state rules to avoid a patchwork of conflicting regulations.
When could the market structure bill reach the President?
Senator Cynthia Lummis indicated the digital asset market structure bill is expected to reach the President’s desk before year-end, aiming for Senate Banking Committee consideration by September and Senate Agriculture Committee by October. The legislative timeline suggests lawmakers seek a final vote in the fall session.
What would the bill change about SEC and CFTC oversight?
The market structure bill will clarify roles between the SEC and CFTC for digital assets, establishing how custody, trading and non-custodial services are regulated. Clear definitions for developers and protocol-level actors are central to ensuring enforcement agencies do not treat open-source contributors as intermediaries.
Frequently Asked Questions
How would federal protections for developers be written into law?
Protections typically appear as statutory definitions and safe-harbor provisions that exclude non-custodial code contributions and protocol-level developers from intermediary classifications. Clear definitions reduce legal ambiguity for enforcement agencies and developers.
Who signed the industry letter?
Signatories include major exchanges and firms such as Coinbase, Kraken, Ripple, a16z, Uniswap Labs, and leading lobbying groups including the Blockchain Association and the Digital Chamber, among others.
Key Takeaways
- Federal clarity is essential: Statutory protections prevent misclassification and protect open-source contributors.
- Broad industry support: 112 organizations back explicit protections to preserve US innovation.
- Timetable: Lawmakers aim to advance the bill through committees in fall and reach the President by year-end.
Conclusion
The coalition’s push for developer and non-custodial protections aims to ensure the market structure bill supports innovation while providing legal certainty. With bipartisan interest and pressure from major industry actors, Congress has an opportunity to enshrine protections that preserve US leadership in blockchain development. Stakeholders should monitor committee actions and engage with legislators to secure clear statutory language.
