Bipartisan Bill Aims to Protect Blockchain Developers
A bipartisan bill titled the "Promoting Innovation in Blockchain Development Act of 2026" has been introduced to shield software developers from being prosecuted as money transmitters. The legislation is seen as a key development for web3 builders, aiming to provide legal clarity and reduce liability for those creating decentralized protocols and applications.
The proposed legislation specifically targets Section 1960 of the U.S. criminal code, which has been used to prosecute developers. This bill clarifies that the statute, originally designed for traditional financial intermediaries, should only apply to entities that have actual custody and control over user funds. This legislative push comes in direct response to several high-profile legal cases that have created significant uncertainty for software engineers in the web3 space. The conviction of Tornado Cash developer Roman Storm and the guilty pleas from the founders of Samourai Wallet, Keonne Rodriguez and William Lonergan Hill, have been frequently cited as catalysts for the bill. The core issue revolves around whether writing and publishing open-source, non-custodial software is equivalent to operating a money transmitting business. Advocacy groups like the DeFi Education Fund and the Blockchain Association argue that if a developer never takes possession of a user's assets, they cannot be considered a money transmitter under the Bank Secrecy Act. This House bill, sponsored by Representatives Scott Fitzgerald, Ben Cline, and Zoe Lofgren, is not the only effort to provide legal clarity. In the Senate, a similar proposal known as the Blockchain Regulatory Certainty Act was introduced by Senators Cynthia Lummis and Ron Wyden to address the same concerns. Proponents argue that without these protections, the U.S. risks losing its competitive edge in blockchain innovation, pushing development and talent to other countries with more favorable regulatory environments. The DeFi Education Fund has compared the current state of blockchain to the early days of the internet, where innovation outpaced existing legal frameworks. A coalition of 115 crypto builders, investors, and advocates, including major players like Coinbase, Kraken, and a16z crypto, has formally demanded these protections be included in any broader digital asset legislation. They point to a drop in the U.S. share of open-source software developers from 25% in 2021 to 18% in 2025 as evidence of the chilling effect of the current legal ambiguity.
