Lummis and Wyden Push Bill to Protect Non-Custodial Blockchain Builders

TLDR

• Bill creates a federal exemption for non-custodial blockchain developers
• Proposal clarifies that writing code does not equal money transmission
• Measure limits regulatory risk for developers without asset control
• Framework blocks conflicting state rules targeting technical activity
• Law aims to keep blockchain innovation and talent within the US

Senate lawmakers advanced a legislative effort as Blockchain Regulatory Certainty Act proposals gained momentum across Congress this week. The Blockchain Regulatory Certainty Act targets legal ambiguity affecting software developers and infrastructure providers. Moreover, sponsors framed the measure as a direct update to outdated money transmission interpretations.

Lummis and Wyden Advance Federal Clarity

Cynthia Lummis and Ron Wyden introduced the Blockchain Regulatory Certainty Act to clarify federal treatment of blockchain builders. The bill addresses concerns that existing statutes misclassify technical activity as regulated financial conduct. Lawmakers positioned the effort as necessary for modern digital infrastructure.

The proposal focuses on developers who build, maintain, or support distributed ledger systems without controlling user assets. Under the Blockchain Regulatory Certainty Act, such activity would not trigger money transmitter obligations. Developers could operate without federal licensing risks tied to asset custody.

Lawmakers emphasized bipartisan alignment and legislative urgency as digital asset usage expands. They argued that unclear rules discourage domestic innovation and slow infrastructure growth. As a result, the Blockchain Regulatory Certainty Act seeks to establish predictable boundaries for technical participation.

Scope of Protection for Non-Custodial Builders

The bill defines non-controlling developers as actors lacking unilateral authority over user transactions or assets. This definition anchors the Blockchain Regulatory Certainty Act within existing financial compliance frameworks. , It separates software creation from custodial financial services.

Protected activities include writing code, publishing upgrades, running nodes, and providing debugging support. Infrastructure providers offering tools for self-custody also fall within the exemption. Thus, the Blockchain Regulatory Certainty Act narrows enforcement exposure tied to routine development work.

The legislation also preserves state enforcement authority while aligning standards with federal guidance. States could enforce consistent laws but not impose contradictory transmitter requirements. Therefore, the Blockchain Regulatory Certainty Act promotes national uniformity without eliminating state oversight.

Legal Context and Enforcement Background

Recent prosecutions heightened concerns surrounding developer liability under existing statutes. Courts accepted arguments that maintaining privacy-focused code constituted regulated financial activity. The Blockchain Regulatory Certainty Act responds directly to these judicial interpretations.

Cases involving Tornado Cash and Samourai Wallet shaped congressional urgency around statutory clarity. Prosecutors classified governance and maintenance roles as money transmission. Developers faced criminal exposure despite lacking custody control.

Supporters argue these outcomes risk criminalizing open-source development practices. They claim the Blockchain Regulatory Certainty Act restores alignment with prior Treasury guidance. Lawmakers framed the bill as both a legal correction and innovation safeguard.

Congressional Path and Policy Implications

The Senate must refer the bill to committee for hearings and markup. Lawmakers may integrate the Blockchain Regulatory Certainty Act into broader technology or finance legislation. The House would need to approve identical language.

A similar House bill advanced in 2025 after committee review and stakeholder input. Industry groups supported safe harbor provisions for enterprise and open-source developers. Congressional familiarity may accelerate review of the Blockchain Regulatory Certainty Act.

Advocates expect the measure to influence regulatory treatment of decentralized technologies. Clear statutory language could guide future enforcement decisions. The Blockchain Regulatory Certainty Act aims to redefine how U.S. law treats blockchain infrastructure builders.

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