The DeFi Education Fund has called on the United States Senate Banking Committee to protect crypto developers in its upcoming draft bill. In its recent post on blogging platform X, the crypto lobby group urged the Senate to rethink how it plans to regulate the decentralized finance industry.
According to the post, DeFi Education Fund said the call became necessary after it reviewed the recently published discussion draft on a key crypto market structure bill. The response, signed on behalf of several DeFi Education Fund members, including a16z Crypto, Paradigm, and Uniswap, noted that regulators need to craft the Responsible Financial Innovation Act of 2025 (RFA) bill in a tech-neutral manner.
DeFi Education Fund wants protection for crypto developers
The Responsible Financial Innovation Act of 2025 was released by Republican leaders on the Senate Banking Committee, noting that it was built on the CLARITY Act passed in the House of Representatives last week. The discussion draft was released by four Republican senators, including banking committee chairman Tim Scott and digital assets subcommittee chairman Cynthia Lummis.
“My colleagues in the House and Senate and I share the same goal: provide clear rules of the road for digital assets,” said Tim Scott. While the Republicans had pushed three crypto bills in the House with bipartisan support at the time, they were only able to pass the Guiding and Establishing National Innovation of US Stablecoins (GENIUS) Act through both chambers before it was signed into law by US President Donald Trump. At the time, Scott and Lummis promised to have the market structure bill passed by the Senate before October.
Reacting to the draft bill, DeFi Education Fund mentioned that crypto developers need to be protected from what they called an “inappropriate regulation meant for intermediaries,” noting that it is important for all Americans to have self-custody rights. In a letter addressed to the Senate Banking Committee Chairman Tim Scott and Senators Lummis, Hagerty, and Britt, it urged them to look into illicit finance, but make sure it doesn’t unfairly burden DeFi innovation.
Senate Banking Committee welcomes feedback on the draft bill
The banking committee had initially requested feedback on the discussion draft to aid their commitment towards building on the Digital Asset Market Clarity Act of 2025, to promote innovation in the DeFi industry, which is presently worth around $141 billion, without compromising consumer protections or financial stability.
In their letter, the group also urged lawmakers to update FinCEN guidance in light of the issues of Tornado Cash developer Roman Storm. “The rulemaking should reflect that technology that solely consists of non-custodial, non-controlling software shall not be regulated as a financial institution or financial intermediary,” the letter said.
In addition, the crypto lobby group also called for federal preemption of state laws to ensure that there are optimal protections for crypto developers. “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,” the crypto lobby group said.
The crypto lobby group was not the only body with a response to the Senate Banking Committee, with a16z Crypto also submitting a separate response. According to a16z, its main criticism of the bill is that it risks undermining investor protections by creating loopholes, especially through the way it treats “ancillary assets.”
The firm is arguing that revamping these assets without changes is incompatible with existing US Securities law, especially the Howey Test. A16z Crypto warns that the proposal could allow insiders to exploit exemptions and dump tokens on the public without oversight from the regulatory bodies. The firm, however, advocates for a digital commodity model that will present clear decentralization requirements.
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