US Lawmakers Introduce Bill to Shield Blockchain Developers from Criminal Liability
Washington, D.C. – A bipartisan coalition of representatives in the U.S. House of Representatives announced Thursday the launch of a new piece of legislation aimed at protecting software engineers who create, maintain, or improve blockchain and cryptocurrency infrastructure. The proposal, titled the Promoting Innovation in Blockchain Development Act (the “Bill”), seeks to narrow the scope of the federal money‑transmitting statute so that it applies only to entities that actually control or hold other users’ digital assets.
Legislative Details
- Sponsors: Rep. Scott Fitzgerald (R‑VA), Rep. Ben Cline (R‑VA), and Rep. Zoe Lofgren (D‑CA) will introduce the Bill during the upcoming session of the 118th Congress.
- Core Amendment: The measure would clarify that Section 1960 of Title 18 of the U.S. Code—currently the “prohibition of illegal money‑transmitting businesses”—shall be limited to parties that have custody or direct control over third‑party crypto assets. Developers whose code simply facilitates transactions or who operate nodes without holding user funds would be excluded from the definition of an unlicensed money transmitter.
- Legislative Path: The Bill is being offered as a “notice” to the House, meaning the sponsors intend to move it forward through the Committee on the Judiciary and, ultimately, the full chamber. No hearing date has been set.
Why the Bill Matters Now
Since 2025, the Department of Justice has pursued several high‑profile prosecutions of blockchain developers under money‑transmitter statutes, despite those individuals not holding user assets. Notable cases include:
- Roman Storm, a developer of the Tornado Cash privacy mixer, who was convicted in August 2025 for operating an unlicensed money‑transmission business.
- Keonne Rodriguez and Will Lonergan Hill, co‑founders of the Samourai Wallet, who pleaded guilty to similar charges in July 2025 and subsequently received prison sentences of four and five years, respectively.
These actions have sparked concerns among the crypto community that the current legal framework fails to distinguish between traditional financial intermediaries and neutral technology providers. Critics argue that the uncertainty hampers innovation and may drive talent overseas.
Industry Reaction
Two prominent crypto‑policy groups have publicly welcomed the proposal:
- The Blockchain Association described the Bill as a “critical step” to ensure that U.S.‑based developers can continue building without fear of criminal prosecution.
- The DeFi Education Fund (DEF) highlighted that the legislation would allow developers to create “neutral technology” domestically, emphasizing that it targets only those who actually take custody of or control users’ money.
Both organizations stress that while the Bill would provide forward‑looking protection, it remains unclear whether it would retroactively affect ongoing or already‑concluded cases.
Parallel Efforts in the Senate
The House initiative follows a similar push from the Senate. In January, Senators Cynthia Lummis (R‑WY) and Ron Wyden (D‑OR) introduced the Blockchain Regulatory Certainty Act, which also seeks to carve out a safe harbor for developers and network operators. The Senate, meanwhile, continues to work on broader digital‑asset market‑structure legislation, notably the CLARITY Act, which passed the Senate Agriculture Committee in early 2025. However, the CLARITY Act’s current language does not explicitly extend developer protections, and attempts to add such safeguards have met resistance from several lawmakers.
Analysis
The introduction of the Promoting Innovation in Blockchain Development Act reflects growing bipartisan awareness that the United States risks falling behind in blockchain talent if the legal environment remains ambiguous. By narrowing the definition of a money transmitter, the Bill could:
- Reduce Legal Uncertainty – Clear statutory language would give developers confidence that routine coding work does not constitute a criminal offense.
- Encourage Domestic Innovation – Protecting U.S. developers may help retain and attract technical expertise, countering the “brain drain” toward jurisdictions with friendlier regulatory climates.
- Limit Enforcement Overreach – A more precise statute could curb future prosecutions that target only the technological layer of services rather than the actual financial operators.
Nevertheless, the bill’s effectiveness hinges on several factors:
- Committee Action: The Judiciary Committee’s willingness to prioritize and advance the proposal will determine its legislative momentum.
- Executive Support: Any eventual enactment will require the President’s signature; the administration’s stance on crypto regulation remains fluid.
- Retroactive Scope: The legislation appears to apply prospectively, leaving past convictions untouched, which could limit its immediate relief for currently incarcerated developers.
Key Takeaways
- Targeted Clarification: The Bill seeks to ensure that Section 1960 only applies to those with custody or control of third‑party crypto assets, not to neutral developers.
- Bipartisan Backing: Sponsored by two Republicans and one Democrat, signaling cross‑party interest in fostering fintech innovation.
- Industry Endorsement: Major crypto advocacy groups have voiced support, underscoring the perceived urgency of legal certainty.
- Parallel Senate Efforts: Similar developer‑protection language is advancing in the Senate, though not yet embedded in broader market‑structure reforms.
- Uncertain Retroactivity: The proposal does not appear to offer relief for already‑convicted individuals, limiting its immediate impact on existing sentences.
As the crypto ecosystem matures, the balance between consumer protection and technological freedom remains a central policy debate. The outcome of this legislative effort will be a bellwether for how U.S. regulators and lawmakers choose to navigate that balance moving forward.
Source: https://cointelegraph.com/news/us-lawmakers-bill-blockchain-developer-protection?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
