US Senator Urges Leaders to Preserve Developer Protections in Crypto Bill

The Digital Asset Market Clarity Act (H.R. 3633) aims to clarify the division of regulatory authority between the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission. Section 604 incorporates the Blockchain Regulatory Certainty Act, specifying that developers of noncustodial software who do not control customer assets are not money transmitters. The dispute centers on whether such legal certainty would also weaken anti-money-laundering monitoring and criminal investigative tools.

On June 22, 2026, the Coalition to End Human Trafficking, joined by the Jesuit Office of Justice and Ecology, dozens of Catholic nuns and survivor leaders, sent a letter to Senate leaders John Thune and Chuck Schumer seeking a review of Section 604. The coalition warned that the exemption could impede efforts to trace funds linked to trafficking, child sexual exploitation and sanctions evasion. No specific sum was involved.

The US Digital Asset Market Clarity Act, or CLARITY Act, is intended to clarify how oversight of crypto assets is divided between the SEC and CFTC. At issue is whether open-source developers, validators and noncustodial wallet providers that neither hold assets nor control transactions could still be treated as brokers, custodians or money transmitters and subjected to financial intermediary obligations.

On June 9, 2026, Solana Policy Institute CEO Kristin Smith urged the Senate to retain the BRCA protections in full. More than 60 crypto industry executives and founders signed the appeal, including Solana co-founder Anatoly Yakovenko. The CLARITY Act passed the Senate Banking Committee by a 15–9 vote on May 14 and is awaiting consideration by the full Senate.

The CLARITY Act aims to clarify how oversight of crypto assets is divided between the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission. The dispute centers on whether the Blockchain Regulatory Certainty Act, or BRCA, should exempt DeFi developers who do not control user assets, determining whether software developers must assume the responsibilities of financial intermediaries.

As of July 19, 2026, bipartisan Senate negotiations had broken down over an amendment providing a BRCA enforcement exemption, despite claims that lawmakers had reached 99% agreement. The legislative window is only about eight weeks. The White House will hold talks with law enforcement groups, but no compromise has emerged on the key provision. The bill could move to separate votes by the two parties, making it unlikely to clear the Senate threshold.

US financial and anti-money-laundering rules could treat programmers who develop decentralized software as financial intermediaries even when they do not control user assets. The prosecution of Tornado Cash developers has fueled industry concerns that merely publishing code could carry criminal liability, making custody of assets the key dividing line for responsibility.

A bipartisan group of US representatives recently introduced the Promoting Innovation in Blockchain Development Act, which states that developers who neither hold nor control customer assets should not be treated as financial intermediaries. The Blockchain Association and DeFi Education Fund support the bill. The report did not provide an introduction date, monetary amount or voting timetable.