Sen. Ron Wyden is pressing Senate leaders to preserve key developer protections in the CLARITY Act as negotiations over the crypto market-structure bill continue. In a letter to Majority Leader John Thune and Democratic Leader Chuck Schumer, the Oregon Democrat urged that Section 604 — the Blockchain Regulatory Certainty Act (BRCA) — remain intact in any version of the bill that reaches the floor.
The BRCA, originally introduced by Sens. Cynthia Lummis and Ron Wyden earlier this year and since folded into the CLARITY Act, would explicitly state that non-custodial software developers are not money transmitters under federal law. Wyden — currently the bill’s only Democratic cosponsor — argued the carve-out would give neutral, open-source developers legal certainty while allowing law enforcement to concentrate on unlicensed money transmitters and other bad actors.
Wyden told leaders the language mirrors current enforcement priorities at the Department of Justice and FinCEN rather than creating a new exemption. He also emphasized a built-in safeguard: developers who transfer or use funds tied to illicit activity would not be protected — keeping accountability for criminal conduct intact while shielding neutral developers from being treated as financial intermediaries.
Developer liability has been one of the bill’s most contentious points. Crypto lawyer Jake Chervinsky warned in March that parts of the Senate draft (Title 3) could still expose some non-custodial developers to money transmitter rules. Sen. Lummis dismissed that interpretation, saying bipartisan revisions would make the CLARITY Act “the strongest protection for DeFi and developers ever enacted.” She later indicated in April she was working on further language to tighten protections for non-money-transmitting developers while ensuring law enforcement can pursue criminal actors, and to clarify how assistance in illicit activity is defined and whether safe-harbor periods should apply to new protocols.
The DOJ’s stance has been broadly consistent with the proposal: Acting Attorney General Todd Blanche has said developers with no involvement in criminal activity would not be prosecuted, with enforcement focused on those directly participating in illegal conduct.
Industry groups back Section 604, arguing it would reduce legal uncertainty for open-source developers and dissuade projects from relocating overseas. But the provision has its critics: some law-enforcement organizations and Catholic leaders warn it could hinder investigations into human trafficking and other financial crimes.
Negotiators still face other sticking points in the CLARITY talks, including ethics rules for public officials with digital-asset holdings and contentious stablecoin yield provisions that split banks and crypto firms. With Congress scheduled to leave for August recess and the November elections looming, lawmakers have a narrowing window to resolve differences and advance the bill through the Senate.
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