- Crypto industry leaders have sent a letter to U.S. lawmakers asking for legal protections for DeFi and open-source software developers.
- The group warns that prosecuting developers, as seen in the Tornado Cash case, could harm innovation in the sector.
- The letter urges changes to the Clarity Act to prevent developers from being classified as unlicensed money transmitters.
- Major firms like Coinbase, Kraken, Ripple, Galaxy Digital, and a16z crypto have signed the appeal.
- The share of U.S. open-source crypto developers has declined from 25% in 2021 to 18% in 2025.
A coalition of 115 crypto firms, investors, and industry advocates has called on U.S. lawmakers to protect open-source and DeFi developers from prosecution. The group sent a letter to the Senate Committee on Banking and Committee on Agriculture on Wednesday, asking Congress to safeguard developers from being charged as unlicensed money transmitters.
The signatories, including prominent companies like Coinbase, Kraken, Galaxy Digital, Ripple, and a16z crypto, support including developer protections in the upcoming Clarity Act, legislation meant to introduce clearer regulations for the crypto industry. The letter emphasized the need to recognize open-source software development as separate from operating a financial service.
The call for action comes shortly after Tornado Cash co-founder Roman Storm was found guilty of running an unlicensed money transmitting business. Although the letter did not mention Storm or Tornado Cash directly, its authors argued that prosecuting developers for building open-source tools poses risks to both innovation and U.S. leadership in crypto. Amanda Tuminelli, executive director at the DeFi Education Fund, stated, “It should be clear from the plain language of the statute that to transfer funds on behalf of the public, you have to have that person’s funds in your possession, custody or control.”
The letter also pointed out a notable trend: the proportion of U.S. open-source crypto developers dropped from 25% in 2021 to 18% in 2025, according to Electric Capital’s Developer Report. Industry supporters warn that without protecting developers, the U.S. risks losing talent to more favorable locations and may hinder goals to become a global crypto leader.
The group highlighted that previous enforcement actions by the U.S. Securities and Exchange Commission (SEC) led to confusion over compliance for crypto firms. The shift in the White House’s stance under President Trump has brought new legislation, like the Genius Act, aimed at clearer regulations. The industry now hopes the Clarity Act will provide a compliant path for developers, but warns that the absence of these protections could undermine support for the bill.
The letter stressed, “Protecting software developers is a firmly bipartisan issue… Without such protections, we cannot support a market structure bill.” For more details, see the original letter and related report.
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