Senator Ron Wyden urged Senate leaders to maintain legal protections for blockchain developers not included in the CLARITY Act as negotiations continue on the cryptocurrency market structure bill.
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- Senator Ron Wyden urged Senate leaders to maintain protections for blockchain developers not included in the CLARITY Act.
- The proposed ruling would make clear that software developers who do not control users’ funds are not treated as money transmitters.
- The Senate is still negotiating developer protections, ethics rules and other unresolved issues before the cryptocurrency market structure bill can move forward.
In a letter sent to Senate Majority Leader John Thune and Senate Democratic Leader Charles Schumer, Democratic Senator Ron Wyden urged congressional leaders to retain Section 604, known as the Blockchain Regulatory Certainty Act (BRCA), in any future version of the CLARITY Act.
The BRCA Act was originally introduced by Senators Cynthia Lummis and Ron Wyden earlier this year. Folded in the law of clarity It will clarify that developers of non-custodial software are not considered money transmitters under federal law. Wyden remains the sole Democratic sponsor of the bill.
This provision would allow law enforcement to focus on unlicensed money transmitters while giving software developers legal certainty, Wyden said in the letter. He said the language is consistent with existing policy at the U.S. Department of Justice and Financial Crimes Enforcement Network rather than creating new exceptions.
“The provision also includes a commonsense exception that any non-detained developers found to be moving or using funds arising from illicit activity are not protected,” Wyden wrote, adding that the proposal would ensure bad actors remain liable while preventing impartial software developers from dealing with them as financial intermediaries.
Developer protections remain at the heart of Senate talks
Developer liability has been one of the most controversial parts of the Senate market structure bill for months.
In March, Sen. Cynthia Lummis It was rejected Concerns raised by cryptocurrency lawyer Jake Chervinsky are that Section 3 of the Senate draft still exposes some developers who are not subject to money transfer rules. Loomis said bipartisan revisions would make the legislation “the strongest protections for DeFi and developers ever enacted” and urged lawmakers to pass the CLARITY Act so these safeguards can take effect.
A month later, Loomis said she was Work on additional changes To enhance protection for developers who do not move money while maintaining the ability of law enforcement to pursue criminal actors. She also said the discussions included clarifying how assistance for illicit activities should be interpreted and whether safe harbor periods should apply to the newly launched protocols.
The US Department of Justice also indicated a similar approach to implementation. Acting Attorney General Todd Blanch previously said developers with no involvement in criminal conduct would not face prosecution, with enforcement focusing instead on those directly involved in illegal activity.
Industry groups supported Section 604, arguing that it would reduce legal uncertainty for open source software developers and discourage blockchain projects from moving offshore. Meanwhile, some law enforcement organizations and Catholic leaders have warned that the measure could weaken efforts to investigate human trafficking and other financial crimes.
Senate negotiators are also still trying to resolve disagreements over ethics rules related to public officials with interests in digital assets. Previous negotiations have tied progress on the legislation to bipartisan agreement on conflict-of-interest provisions, while separate discussions continue over stablecoin revenue rules that have divided banks and cryptocurrency companies.
With Congress expected to leave Washington in August and the November elections approaching, lawmakers face a narrow window to advance the CLARITY Act through the Senate.
