DEF Pushes Back on Senate Bill Targeting Crypto Developers

DeFi Group DEF Pushes Back on Senate Bill Targeting Crypto Developers

Written by Aaron S.,

Editor-In-Chief

Last Updated: August 04, 2025

Key Takeaways

DEF urged the Senate to keep crypto rules tech-neutral and protect open-source developers from being treated like financial institutions;
The group stressed that non-custodial tools should not face the same rules as intermediaries and called for updates to FinCEN guidance;
DEF warned that traditional finance could exploit state laws to block DeFi competition and pushed for consistent federal regulation.

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The DeFi Education Fund (DEF), a group that represents major players in decentralized finance (DeFi), has shared its concerns with the US Senate Banking Committee after reviewing a new draft of the Responsible Financial Innovation Act (RFA) of 2025.

In an August 1 letter signed by members such as Uniswap UNI $10.82 Labs, a16z Crypto, and Paradigm, the group called for the bill to be more neutral when it comes to technology.

They noted that developers building open-source crypto tools should not be treated like financial service providers or middlemen. DEF also emphasized that the right of individuals to manage their own digital assets, known as self-custody, should be protected.

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The letter stressed that rules aimed at stopping illegal activity should not block new ideas in DeFi. DEF warned that laws made for traditional finance should not be applied to systems that do not involve third parties.

DEF also asked lawmakers to update FinCEN guidelines so that tools built without control over users’ funds are not treated like financial institutions.

The group said:

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.

Additionally, DEF argued that companies in traditional finance might use state-level enforcement to target DeFi developers, not to protect users, but to remove competition. The group stated that federal law should take priority over state rules to create protections for everyone working in the industry.

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