Wyden urges Senate to keep crypto developer protections

Sen. Ron Wyden asked Senate Majority Leader Chuck Schumer and Senate Minority Leader John Thune to keep a provision known as the Blockchain Regulatory Certainty Act in the CLARITY Act. A copy of his letter was shared publicly on Wednesday. Wyden said the provision would spare open‑source and non‑custodial developers from being classified as money transmitters when they do not control user funds.

The BRCA would exempt creators of software that lets users manage their own digital assets if the developer cannot access or control those assets. Wyden argued the change would provide legal clarity for people who build wallets, smart contracts and other tools that do not hold customer funds. He wrote that treating such developers as money transmitters “punishes technological innovation and advancement in strategically important areas at a time when the United States must remain globally competitive.” He added that the provision reflects guidance from the Financial Crimes Enforcement Network and would give “legal certainty for developers of open‑source and non‑custodial projects to continue building and developing the decentralized finance ecosystem right here in the United States.” He also wrote, “Smart policy will empower law enforcement to do its job and facilitate innovation at the same time.”

The BRCA has drawn support from crypto industry groups and developers who argue non‑custodial software creators cannot access user funds and should not face regulatory requirements designed for financial intermediaries. Opposing views include several law enforcement organizations and a coalition of Catholic groups, which warned that exempting developer activity could create gaps in oversight and make it harder to investigate illicit uses of digital assets.

Senate negotiators are working to shape a version of the CLARITY Act that can win broad support before a floor vote. Supporters of the bill want to pass it before the current Congress ends to avoid reintroducing the measure next year. The calendar is tight: senators face an August recess and are aiming for votes ahead of the November elections, and a market analysis firm recently lowered its estimate of the bill’s odds of becoming law this year to about 50%.

The CLARITY Act includes other contested provisions. Some lawmakers have pushed for stronger ethics rules tied to official involvement in crypto after President Donald Trump disclosed an estimated $1.4 billion gain from crypto investments last year. Negotiators say they must resolve those and other issues before the bill reaches the floor without extended debate.

Lawmakers, industry groups and advocacy organizations are expected to continue negotiating the BRCA language as leaders move to finalize the CLARITY Act package in the coming weeks.