A bipartisan group of US lawmakers has introduced a new bill aimed at protecting blockchain software developers from certain criminal prosecutions. The authors of the text believe that this initiative would clarify the application of federal law to developers who do not control user funds. According to its supporters, several recent cases have helped create legal uncertainty for creators of open source tools. This proposal is part of a broader debate in Congress over the regulation of digital assets.
In brief
- The bill limits liability to actors who own or control users' digital assets.
- Non-custodian developers would not be considered money transmitters within the meaning of Section 1960.
- Industry players believe the measure could prevent future lawsuits against crypto developers.
- Parallel initiatives in the Senate also aim to clarify the legal status of developers.
The Chamber wants to regulate prosecutions targeting crypto developers
Reps. Scott Fitzgerald, Ben Cline and Zoe Lofgren introduced the bill titled “Promoting Innovation in Blockchain Development Act” on Thursday. This aims to clarify the application of article 1960 of federal law, which prohibits the operation of a money transmission activity without a license, to blockchain developers.
According to the text, criminal liability would only concern persons or entities exercising custody or control digital assets of others. Developers who simply write code or maintain blockchain infrastructure, without managing user funds, would not be considered money transmitters.
The Blockchain Association called the bill a critical safeguard for U.S.-based developers. For its part, the DeFi Education Fund believes it could prevent lawsuits similar to those brought against creators of privacy-focused tools.
According to this organization, the legislation clarifies that developers who do not hold user funds can design neutral and open source software without being considered as financial intermediaries with regard to criminal law.
Towards a clearer legal framework for developers
Supporters of the text believe that clarifying responsibilities could have concrete implications for several segments of the ecosystem:
- Open source contributors could publish and maintain code without being seen as money transmitters.
- Developers of decentralized protocols would not be held responsible if they do not control user assets.
- Infrastructure operators, including nodes and validators, would not automatically be exposed to criminal prosecution.
- The courts would have clearer criteria to determine whether an activity constitutes the transmission of money.
This request for clarity comes after several high-profile cases involving crypto developers. In August 2025, Roman Storm was convicted of operating an unauthorized money transmitting business.
In July, Keonne Rodriguez and William Lonergan Hill pleaded guilty to similar charges, before being sentenced to five and four years in prison, respectively. Roman Storm has not yet been sentenced and could face additional charges.
It remains to be determined whether this new legislation could apply retroactively to past or current cases.
Senators Cynthia Lummis and Ron Wyden introduced the Blockchain Regulatory Certainty Act in January, which aims to affirm that writing code or maintaining decentralized networks does not, in itself, constitute operating an unlicensed money transmission business.
At the same time, lawmakers continue to consider broader market reforms. The CLARITY Act was approved by the Senate Agriculture Committee in January, but has not yet been considered by the Banking Committee. It remains unclear whether the final version of these texts will explicitly include protections for developers, as discussions continue in Congress.
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