Crypto Industry Stands United Against Senate Bill

Crypto Industry Pushes Back on Senate Bill: Developer Protections at Stake

A broad coalition of crypto companies and tech lobbying groups is pushing back against a proposed Senate bill concerning crypto market structure. Their primary concern? The lack of sufficient legal protections for software developers.

In a joint letter addressed to the Senate Banking Committee, over 100 entities, including industry heavyweights such as Andreessen Horowitz, Coinbase, Digital Currency Group (DCG), Grayscale, Kraken, Paradigm, Solana Labs, and Uniswap Labs, warned they would collectively oppose the bill unless it includes robust safeguards for software developers and non-custodial service providers.

“Without such protections, we cannot support a market structure bill,” the letter stated.

The concern stems from the possibility that certain Senate Democrats might introduce provisions that would make developers criminally liable for creating software used in activities like money laundering or sanctions evasion. The crypto industry views this as a critical issue that necessitates a unified response.

The industry is drawing a parallel to traditional infrastructure, arguing that developers shouldn't be penalized for how their tools are used by others.

The letter also highlights the recent passage of the CLARITY Act in the House, which offers some carve-outs for decentralized finance (DeFi) and peer-to-peer transactions. However, the industry believes the Senate needs to go further by explicitly shielding software developers from criminal liability.

Key Takeaways:

• The crypto industry is united in its demand for legal protections for software developers in the upcoming Senate crypto market structure bill.
• The industry fears potential criminal liability for developers of software used for illicit activities.
• The letter calls for clarification that developers should not be prosecuted as operators of money transmitting businesses.
• The industry argues that public blockchains are neutral infrastructure, similar to the internet or roads, and developers should not be held responsible for how their tools are used by others.
• The push comes after the DOJ convicted a software developer for creating a coin mixing service, signaling a need for clear legislation.

This united front underscores the industry's commitment to fostering innovation and preventing regulations that could stifle open-source development and drive blockchain innovation overseas.