US Bill Proposes Shielding Non-Custodial Devs
A U.S. blockchain innovation bill is gaining traction, with a key provision that would shield non-custodial software developers from certain liabilities. This move is seen as a crucial step to provide regulatory clarity and protect open-source contributors in the crypto ecosystem.
The "Promoting Innovation in Blockchain Development Act of 2026" was introduced in the House by a bipartisan group including Representatives Scott Fitzgerald, Ben Cline, and Zoe Lofgren. This bill specifically targets Section 1960 of the U.S. criminal code, which has been used to prosecute developers as operators of unlicensed money transmitting businesses. The legislation aims to create a legal distinction for "non-controlling developers." This category would cover developers who write and publish code without ever taking custody or control of user funds, separating them from financial intermediaries who actually handle assets. This legislative push is a direct response to recent high-profile enforcement actions that have unsettled the developer community. The prosecutions of developers associated with Tornado Cash and Samourai Wallet, where they were charged as money transmitters, spurred lawmakers to seek clearer safe harbors for coders. A companion bill, the Blockchain Regulatory Certainty Act, was introduced in the Senate by Senators Cynthia Lummis and Ron Wyden in January 2026. Both bills aim to ensure developers can build open-source financial technology in the U.S. without fear of being misclassified as a financial institution. Advocacy groups like the DeFi Education Fund and the Blockchain Association have thrown their support behind the House bill. They argue that this legal clarity is a critical step to prevent an exodus of developer talent and to maintain U.S. competitiveness in blockchain innovation. This developer shield bill is part of a broader legislative effort to establish a comprehensive framework for digital assets. It complements the Financial Innovation and Technology for the 21st Century Act (FIT21), which passed the House in May 2024 and aims to clarify the jurisdictional lines between the SEC and CFTC. While FIT21 addresses the broader market structure, the Promoting Innovation in Blockchain Development Act hones in on the specific criminal liability of developers. Its goal is to amend the criminal code directly to protect open-source software creation, a concern that has intensified as prosecutors have increasingly focused on the creators of decentralized protocols.
