Wyden Urges Senate to Preserve Blockchain Developer Protections in Clarity Act

Sen. Ron Wyden urged Senate leaders to keep language in the Clarity Act, a crypto market-structure bill, that would shield blockchain software developers.

The Block reported on July 8 that Wyden, an Oregon Democrat, sent a letter this week to Senate Majority Leader John Thune and Senate Democratic Leader Chuck Schumer asking them to preserve Section 604 of the Clarity Act, known as the Blockchain Regulatory Certainty Act, or BRCA, as the bill moves through the legislative process.

The BRCA would create a safe harbor to ensure non-custodial blockchain software developers are not classified as money transmitters. The measure was originally introduced as a standalone bill before being incorporated into the Clarity Act. It has since become a key issue in broader debate over crypto legislation. Sen. Cynthia Lummis, a Republican, introduced it earlier this year, and Wyden is its only co-sponsor.

"Smart policy can let law enforcement do its job while also promoting innovation," Wyden wrote in the letter, urging lawmakers to keep the BRCA in the Clarity Act. He added that the provision includes a common-sense exception denying protection to non-custodial developers who transfer or use illicit funds. That would allow authorities to hold bad actors accountable without misclassifying good-faith software developers as financial intermediaries.

The crypto industry largely supports the provision, arguing that it would give developers needed legal clarity and help keep innovation from moving overseas. Some law-enforcement groups and religious organizations oppose it, saying it could weaken safeguards against human trafficking and hinder investigations.

Time pressure is also mounting around the Clarity Act. Congress is approaching its August recess, and the November election is drawing closer, leaving limited floor time to advance the bill. Aside from the BRCA provision, another unresolved issue is whether to add ethics rules addressing potential conflicts of interest involving President Donald Trump, other administration officials and lawmakers tied to the digital-asset industry.