US Senators Cynthia Lummis and Ron Wyden have introduced standalone legislation to ensure that blockchain developers and service providers who don’t directly handle user funds are exempt from money transmitter regulations.
The Blockchain Regulatory Certainty Act (BRCA), introduced by Lummis and Wyden on Monday, aims to clarify that writing software or maintaining networks doesn’t trigger federal or state money-transfer requirements.
There have been mounting concerns among crypto developers about being held criminally liable for the way people choose to use their software.
Last year, Tornado Cash co-founders Roman Storm and Alexey Pertsev were found guilty of operating an unlicensed money-transmitting business in connection with the mixing protocol.
Lummis said in a statement that the bill aims to provide developers with the clarity needed to “build the future of digital finance without fear of prosecution for activities that pose no money laundering risk,” as regulatory uncertainty under the current law has “driven innovation offshore and subjected them to conflicting state regulations.”
“Blockchain developers who have simply written code and maintain open-source infrastructure have lived under threat of being classified as money transmitters for far too long.”
“This designation makes no sense when they never touch, control, or have access to user funds, and unnecessarily limits innovation,” Lummis said, adding that it’s time to stop treating developers as banks simply for writing code.
Source: Cynthia Lummis
Crypto market structure bill has similar protections
Similar protections are included in the crypto market structure bill, which is headed for a markup with the Senate Banking Committee on Thursday.
Provisions in a draft bill aren’t guaranteed, and they can be amended, watered down, or stripped during markup before it’s voted to become law.
The other panel that needs to approve the market structure effort, the Senate Agriculture Committee, has delayed its hearing until the last week of January, according to a statement from Chairman John Boozman.
Industry gives tick of approval
Several groups in the crypto industry have already voiced approval for the BRCA.
Crypto lobby group, the DeFi Education Fund, said in an X post on Monday that the bill “provides critical protections for software developers of non-custodial, decentralized technologies.”
“The BRCA must be included in market structure legislation, and we encourage all Congressional leaders to join Senators Lummis and Wyden in prioritizing clarity and protections for software developers building our financial future.”
Non-profit crypto advocacy organization, the Blockchain Association, said “Clear rules are essential for innovation to thrive in the US,” and it’s “critical that the Blockchain Regulatory Certainty Act remains in market structure legislation.”
Meanwhile, Alexander Grieve, the vice president of government affairs for investment firm Paradigm, said the BRCA is “crucial legislation to support US blockchain development.”