A letter was recently sent to the Senate Banking Committee by the DeFi Education Fund, which urged that a key crypto market bill be framed in a more tech-neutral manner and that protections for crypto developers be strengthened.
Following its review of a recently published discussion draft on a key crypto market-structure bill, the crypto lobby group DeFi Education Fund has called on the U.S. Senate Banking Committee to reconsider its approach to regulating the decentralized finance industry.
The response, signed on behalf of DeFi Education Fund (DEF) members such as a16z Crypto, Uniswap Labs, and Paradigm, states that the Responsible Financial Innovation Act of 2025 (RFA) bill should be crafted in a more tech-neutral manner. It also asserts that crypto developers should be protected from “inappropriate regulation meant for intermediaries” and that self-custody rights for all Americans are “essential.”
In a letter sent on Friday to Senate Banking Committee Chairman Tim Scott and Senators Cynthia Lummis, Bill Hagerty, and Katie Britt, it was added that legislation should “address illicit finance but not unfairly burden DeFi innovation.”
Senate Banking Committee Welcomes Feedback on Draft Crypto Bill
To ensure that it builds on the Digital Asset Market Clarity Act of 2025 to promote innovation within the $141 billion DeFi industry without compromising consumer protections or financial stability, feedback on the discussion draft was requested by the banking committee.
Protecting Crypto Developers Is a Top Priority
The DeFi Education Fund also requested that lawmakers update the FinCEN guidance in light of the case involving Tornado Cash developer Roman Storm.
The rulemaking, according to the letter, should reflect that technology consisting solely of non-custodial, non-controlling software should not be regulated as a financial institution or financial intermediary.
A call for federal preemption of state laws was also made by the crypto lobby group to ensure consistent protections for crypto developers across the nation.
In an argument for federal law to preempt conflicting state regulations, the DEF stated that “well-resourced traditional financial institutions may exploit the fragmented regulatory landscape by funding or encouraging state-level enforcement actions against DeFi developers — not to protect consumers, but to stifle competition.”
A16z Crypto Submits Its Own Response to the Senate Banking Committee
A separate response was also submitted to the Senate Banking Committee on Thursday by a16z Crypto, the crypto division of the tech-focused venture capital firm a16z.
The primary criticism of the draft crypto bill from a16z is that it risks undermining investor protections by creating dangerous loopholes, particularly through how it handles “ancillary assets.”
The firm contends that redefining these assets without significant changes is incompatible with existing U.S. securities law, especially the Howey test. It warns that the proposal could be exploited by insiders who might dump tokens on the public without regulatory oversight.
A “digital commodity” model with clear decentralization requirements is instead being advocated for by a16z.
