More than 100 cryptocurrency entities are calling on lawmakers to protect software developers as they deliberate how the digital asset industry is regulated.
The DeFi Education Fund (DEF), alongside the Blockchain Association, the Digital Chamber, Stand with Crypto and several crypto firms, including Coinbase, Paxos and Uniswap Labs, urged Senate Committee leadership to include their ask in market structure legislation.
The stakeholders said that they could not support a market structure bill without the protections asked for being put in place.
“In the largest crypto advocacy coalition in history, over 110 organizations, builders, and investors came together with DEF to ask Congressional leaders to protect software developers and non-custodial service providers in federal market structure legislation,” said Amanda Tuminelli, executive director of the DeFi Education Fund, in a statement. “This issue unites the crypto industry.”
The letter was sent to Senate Banking Committee Committee and Senate Agriculture Committee leadership. Both committees will play a significant role in how crypto legislation shapes up.
Lawmakers in Washington in both the House and Senate have been working over the past year on legislation to regulate the cryptocurrency industry at large. Senate Banking Committee Republican Chair Tim Scott released a discussion draft for a larger crypto market structure last month with a self-imposed deadline of Sept. 30 for committee action. The full House last month passed a market structure bill, called the Digital Asset Market Clarity Act. Ultimately, the House and Senate will have to decide on a final version of the bill.
As for protections for software developers, last week, a top Justice Department official said that “writing code” was not a crime, marking a significant departure in how prosecutors plan to view them.
The crypto stakeholders on Wednesday said additions to both the House and Senate versions of market structure legislation to protect self-custody and the ability to engage in peer-to-peer transactions were needed, and urged that these changes be included.
“These protections must make explicit that no individual or entity is subject to regulation solely for engaging in activities that are core to creating, developing, publishing, and maintaining blockchain networks, nor for enabling users to access such networks via software interfaces while maintaining custody of their own funds,” they said.
Their letter comes as tensions flare between traditional finance and crypto on how the digital asset industry should be regulated, as reported earlier this week by Politico.
The largest banking associations have been urging lawmakers to fix a stablecoin bill signed into law last month amid concerns over interest payments, state regulation, and non-financial companies issuing stablecoins.
Meanwhile, the Securities Industry and Financial Markets Association, which represents financial firms, has urged the Securities and Exchange Commission to deny digital asset companies the opportunity to offer tokenized equities through specific exemptive relief and instead adopt a more transparent approach.
Lawmakers come back to Washington next month.
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