Senate draft bill wins community praise for the strongest developer protection in cryptography

The Senate Banking Committee’s latest market structure discussion draft has received positive early responses from cryptocurrency industry leaders. The 182-page “Responsible Financial Innovation Act 2025” text released Friday afternoon includes what experts describe as the most comprehensive developer protection language ever seen in federal law.

Amanda Tuminelli, executive director and CLO of the Defi Education Fund, praised the draft developer protection, calling it the best language observed in previous legislative proposals. Legal expert Gabriel Shapiro highlighted the bill’s improved approach to a distributed governance system. He also said the law addresses previous concerns regarding governance tokens that could create complexity in securities laws.

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Legislative frameworks address concerns from major industries

Shapiro specifically praised the draft’s handling of decentralized autonomous organizations. This includes blockchain-based governance tokens (Borg). Rather than applying wide limits to payment and utility tokens, the law restricts “disqualification of financial rights” to actual securities.

The bill will create clarity on decentralized governance, staking mechanisms, airdrops, tokenization processes, and self-reliance protection. Other provisions include existing unfair token protection measures against future SEC enforcement actions and exemptions from decentralized physical infrastructure networks and Defi protocols.

Colin McLaren stressed the importance of Democrats’ support for the law, arguing that Senate Democrats should prioritize innovation over regulatory constraints. Rather than enriching legal experts through long-term regulatory uncertainty, McLaren referenced the possibility of building the “next great American startup.”

Draft establishes a double regulatory structure

The draft establishes a double regulatory structure that divides oversight responsibility between the Securities and Exchange Commission and the Commodity Futures Trading Commission. The framework aims to resolve the jurisdiction ambiguity that influenced digital asset regulation by creating clear boundaries based on asset classification and functional characteristics.

Under the proposed structure, CFTC acquires key authority over digital goods. This is essentially linked to a blockchain system that derives value from blockchain functionality. The SEC maintains security oversight and maintains authority over investment contracts involving digital goods during primary market transactions.

The next step is for the Banking Committee to introduce a formal bill and potentially implement the markup procedure by the end of the month. The progression of the timeline depends on the democratic response and willingness to negotiate divisive provisions within the scope of the bill.

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