DeFi Leaders Demand Legal Protections for Developers

The decentralized finance (DeFi) community is advocating for significant legal protections for developers and builders to safeguard them from potential legal challenges similar to those faced by Roman Storm of Tornado Cash.

Key Takeaways

A coalition from the DeFi community is pushing for protections for developers in a new market structure bill.
There has been a significant drop in U.S. developers due to regulatory uncertainty, decreasing from 25% to 18%.
Legal experts stress that the bill should protect developers from previous hostile regulatory environments.
The discussion surrounding the legislation will continue in September, with expectations for clarity between the SEC and CFTC.

The DeFi leaders express strong concerns that the decline in U.S. developers—down by 7% in four years—stems from the ongoing lack of regulatory certainty. “The total share of open-source software developers in the United States dipped from 25% in 2021 to 18% in 2025, a decline largely linked to ambiguous regulations surrounding software development," they stated.

Failure to address this issue could jeopardize President Trump’s ambition of establishing the U.S. as the leading hub for cryptocurrency innovation. Many legal experts in the crypto field echo this sentiment. Jake Chervinsky, the chief legal officer at crypto venture capital firm Variant Fund, noted, “The forthcoming legislation must protect developers from reverting to the previous administration's hostile policies. No protections for developers mean no support for the bill.”

Amanda Tuminelli, the Executive Director and legal officer at DEF, expressed that developers must not be 'misclassified' under regulations designed for traditional financial intermediaries.

Congress is poised to face a challenging balancing act as various stakeholders clamor for favorable conditions within the crypto legislation. The banking sector has intensified its efforts to block interest accrued on payment stablecoins, arguing it poses a threat to traditional banks. Additionally, traditional stock exchanges have raised alarms about tokenization, especially regarding on-chain stocks, asserting that these could undermine equity market integrity.

In light of these concerns, traditional financial institutions are urging Congress and regulators to ensure that on-chain stock issuers comply with established regulatory standards. Meanwhile, the crypto lobby is strengthening its influence ahead of the 2026 midterm elections, complicating matters for Congress members who oppose crypto initiatives.

Discussions regarding the market structure legislation are scheduled to resume in September. The Senate Agriculture Committee, which oversees the Commodity Futures Trading Commission (CFTC), will release a draft of the bill in early next month. Jurisdictional conflicts between the SEC and CFTC are anticipated to be clarified by the end of that month, which could lead to more streamlined oversight of the digital asset space.

While some stakeholders remain hopeful that the legislation can be passed by the end of the year, others caution that delays may extend the timeline into the following year.

Crypto bill DeFi

A coalition of 115 DeFi professionals, spearheaded by the DeFi Education Fund (DEF), has sent a letter to the Senate. They are urging Congress to incorporate comprehensive protections for software developers and non-custodial service providers within the upcoming market structure legislation. The group emphasizes a firm stance: without these legal safeguards, they will not support the bill.