Senator Lummis rejects claims developer protections could be cut – Details

Pro-crypto Senator Cynthia Lummis has reassured the industry that there are no plans to axe Web3 developer protections in the crypto market structure bill, the CLARITY Act. 

In response to speculations that Coinbase is reportedly ready to give up developer protections and Bitcoin’s tax exemption to secure a stablecoin yield deal, Senator Lummis replied, 

The lawmakers introduced the Blockchain Regulatory Certainty Act (BRCA) in January 2026 to safeguard blockchain developers and infrastructure providers from being categorized as money transmitters. 

Notably, BRCA posits that if a service provider does not control user funds, it shouldn’t be forced to obtain a money transmitter license. 

The draft legislation covers activities including developers of open source software, those running nodes and validating transactions, and people handling non-custodial infrastructure. 

By extension, the legislation also seeks to offer an adequate pathway for developer protection, which was not exhaustively captured by the broader crypto market structure bill – The CLARITY Act. 

Uncertainty over developer protections

So, why draft a separate legislation to act as a safe harbor for developers? Given the limited provision in the CLARITY Act, Senator Lummis and Wyden expect the bill could be amended and adopted in the broader crypto bill. 

At the time of writing, however, the BRCA had not been amended or adopted into the CLARITY Act. That said, like stablecoin yield and tokenized securities, developer protection has been part of the ongoing discussions and is one of the demands from the crypto industry. 

As such, the claims that it was being considered as a compromise to allow stablecoin yield triggered an alarm across the industry. 

In fact, Alexander Grieve, VP of GOvernment Affairs at Paradigm, a crypto infrastructure developer, said the sector will walk away from the bill if developer protection is axed. 

With Lummis’s assurance, however, the crypto leaders have now calmed down. 

Even so, the push to retry Tornado Cash founder Roman Storm for sanctions violations and money laundering has alarmed Web3 developers and the sector. 

According to crypto supporters, Storm didn’t control user funds in the crypto mixer. As such, he shouldn’t be held liable for the actions of third-party users on the platform. Instead, the government should directly go after the third-party users who have broken the law. 

Storm was found guilty of operating an unlicensed money-transmitting business, and the industry wants to prevent this from happening to other non-custodial developers through BRCA. Alas, it remains unclear whether the industry’s plan will succeed or not. 

Final Summary 

• Senator Lummis clarified that there are no plans to axe developer protections 
• The DoJ’s push to retry Tornado Cash’s founder has alarmed developers and the sector.