Cryptocurrency advocacy groups are pushing for the protection of software developers in a rapidly evolving regulatory landscape. On June 6, 2025, a coalition of these groups called on lawmakers to incorporate provisions safeguarding devs from being classified as money transmitters within a broader crypto market structure bill. This move underscores the ongoing tension between innovation and regulation in the digital asset space.
Developer Protections at the Forefront
The heart of the matter lies in the role of software developers who, under certain interpretations of the law, could be deemed money transmitters. This classification brings a host of regulatory requirements and potential liabilities—an outcome the advocacy groups argue is both unfair and detrimental to the industry’s growth. “Software developers are the architects of innovation in the crypto world,” said Jamie Chen, a policy analyst at Crypto Rights Watch. “Labeling them as money transmitters is not only misguided but risks stifling innovation at its core.”
At the center of this debate is the broader crypto market structure bill currently being deliberated in Congress. The bill aims to establish a clear regulatory framework for digital assets, but its current iteration does not explicitly address the unique role of software developers. The proposed amendment seeks to rectify this, ensuring that devs are not inadvertently caught in the regulatory crossfire. As explored in U.S. Congress Braces for Intense Debate Over Crypto Legislation This Summer, the legislative discussions are expected to be particularly heated this season.
The Stakes for Innovation
The implications of classifying developers as money transmitters are significant. It could impose onerous compliance burdens on individuals and small teams, potentially driving talent away from the U.S. crypto landscape. This is particularly pressing at a time when global jurisdictions are vying for supremacy in the digital economy. “The U.S. risks falling behind if we don’t create an environment that fosters technological advancement,” noted Alex Rivera, a blockchain consultant based in San Francisco.
Historically, the crypto sector has thrived on a culture of open-source development and collaboration. The fear among developers is that stringent regulatory interpretations could chill this spirit of innovation. As Rivera puts it, “We need a legal framework that distinguishes between those who write code and those who engage in financial transactions.”
Navigating the Regulatory Labyrinth
This push for clarity comes amid a broader regulatory crackdown on the crypto sector. Recent actions by the Securities and Exchange Commission (SEC) and other regulatory bodies have underscored the need for a comprehensive approach to digital asset regulation. However, the path forward is fraught with challenges. Balancing the need for oversight with the desire to promote innovation is no easy feat. For a deeper dive into the regulatory implications, see Crypto Coalition Tells SEC Staking Is ‘Essential Good,’ Not a Security.
There are also questions about how such protections would be implemented. Would they apply to all developers, or only those working on certain types of projects? How would the line be drawn between writing code and facilitating transactions? These are the nuances that lawmakers will need to consider as they craft legislation.
Looking Ahead: Opportunities and Challenges
The call for developer protections is not just about shielding individuals from undue regulatory burdens. It’s about fostering an ecosystem where technology can flourish. As the crypto industry continues to mature, the need for thoughtful, nuanced regulation becomes ever more apparent. The outcome of this legislative push could have lasting implications for the future of blockchain technology in the United States.
Will lawmakers heed the call of crypto advocates and carve out protections for developers? The answer could shape the trajectory of the industry for years to come, raising questions about whether the U.S. can maintain its position as a leader in the digital economy. As the debate unfolds, one thing is clear: the stakes have never been higher.
Source
This article is based on: Crypto lobby wants software dev protections added to crypto bill
Further Reading
Deepen your understanding with these related articles:
- US crypto groups urge SEC for clarity on staking
- UK’s FCA Seeks Public and Industry Views on Crypto Regulation
- Trump’s Crypto Sherpa Bo Hines Says Crypto Legislation on Target for Quick Completion
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
