U.S. Senators Cynthia Lummis and Ron Wyden have introduced standalone legislation aimed at exempting blockchain developers and service providers who do not handle user funds from money transmitter regulations. The bill seeks to clarify legal liabilities and prevent developers from being treated as financial institutions solely for writing code.
On Monday, Senators Cynthia Lummis and Ron Wyden introduced the Blockchain Regulatory Certainty Act (BRCA). The primary goal of the legislation is to clarify that the act of writing software or maintaining blockchain networks does not trigger federal or state money-transfer requirements.
The introduction of the BRCA comes amidst growing concerns among crypto developers regarding potential criminal liability for how their open-source software is utilized by others. These fears were exacerbated last year when the co-founders of the mixing protocol Tornado Cash were found guilty of operating an unlicensed money-transmitting business.
In a statement, Senator Lummis emphasized the need to eliminate regulatory ambiguity that has "driven innovation offshore." She argued that developers need the clarity to "build the future of digital finance without fear of prosecution for activities that pose no money laundering risk." Lummis stressed that it makes no sense to classify developers as money transmitters when they never touch, control, or have access to user funds.
While similar protections are currently included in the broader crypto market structure bill heading for a markup, provisions in such drafts are not guaranteed and could be amended or stripped. Thus, this standalone bill serves as a critical safeguard.
The crypto industry has voiced strong approval for the BRCA. Groups such as the DeFi Education Fund, the Blockchain Association, and Paradigm have endorsed the bill, stating that clear rules are essential for innovation and that protections for non-custodial, decentralized technologies are crucial for the future of U.S. blockchain development.