Friday, August 29, 2025

Industry Leaders Urge US Senate for Clear DeFi Regulations

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KEY TAKEAWAYS

  • Over 100 industry leaders, including 1inch, urge the US Senate for clear DeFi regulations to protect developers and non-custodial service providers.
  • 1inch’s Chief Legal Officer emphasizes the need for regulatory clarity to ensure protocol security and innovation in the DeFi sector.
  • The letter warns that without developer protections, the US risks losing its leadership in financial technology and blockchain development.
  • Signatories support legislative measures like the Blockchain Regulatory Certainty Act to safeguard self-custody and peer-to-peer transactions.

Over 100 industry leaders, including 1inch, have signed a letter addressed to the US Senate Committees on Banking and Agriculture, advocating for the protection of software developers and non-custodial service providers. The central message of the open letter emphasizes the need for clear rules in the decentralized finance (DeFi) sector to prevent innovation from stalling and to avoid the risk of industries moving away from the United States.

Orest Gavryliak, Chief Legal Officer at 1inch, highlighted the importance of regulatory clarity for protocol security, stating, “Protocol security starts with clarity for people who build them.” He further noted that 1inch stands with over 110 industry leaders in calling for developer protections in US market structure legislation. The letter stresses that DeFi requires clear rules rather than “chilling risks.”

The letter, signed by 112 builders, investors, and advocates, including notable entities like Coinbase, Solana Foundation, and Uniswap Labs, calls for robust nationwide protections for software developers and non-custodial service providers. It warns that without such protections, support for a market structure bill cannot be guaranteed. The signatories argue that DeFi innovators should not be treated like traditional custodial intermediaries, as they do not control or have custody of user assets.

Impact of Regulatory Uncertainty on US Developers

The letter highlights the decline in the share of open-source software developers in the United States, which dropped from 25% in 2021 to 18% in 2025. This trend, if continued, could jeopardize the US’s position as a leader in financial technology. The President’s Working Group has previously warned that reversing the decline of blockchain development is crucial for making America the crypto capital of the world.

The signatories welcome the inclusion of measures like the Blockchain Regulatory Certainty Act and Keep Your Coins Act in draft legislation, which safeguard self-custody and peer-to-peer transactions. However, they urge lawmakers to ensure nationwide clarity and protection for builders, enabling them to innovate with confidence.

For more details, the full letter can be accessed here.

Over 100 industry leaders, including 1inch, have signed a letter urging the US Senate to establish clear regulations for the DeFi sector, aiming to protect software developers and non-custodial service providers.

A recent report highlights the trend towards increased regulatory clarity, which is essential for fostering institutional adoption and ensuring security in the DeFi sector. The call for clear rules aligns with this trend, as it seeks to prevent innovation from stalling and to maintain the US’s competitive edge in financial technology.

As per insights from Forklog, major industry coalitions, including Coinbase and Uniswap Labs, emphasize the need for federal protections to prevent DeFi developers from being treated as financial intermediaries. This supports the industry’s call for regulatory clarity to promote innovation and protect developer rights.


Disclaimer: The views expressed in this article are those of the authors and do not necessarily reflect the official policy of CoinsHolder. Content, including that generated with the help of AI, is for informational purposes only and is not intended as legal, financial, or professional advice. Readers should do their research before taking any actions related to the company and carry full responsibility for their decisions.
Neel Kapoor
Neel Kapoor
Neel Kapoor is a dedicated cryptocurrency enthusiast and blockchain expert at Coinsholder.com. With over a decade of experience, Neel offers insightful analysis and commentary on the latest trends and innovations in the crypto space. His clear and concise writing makes complex topics accessible to all readers.

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