US Democratic Senator Ron Wyden has urged Senate leaders to ensure that crypto developer protections stay in the crypto market structure legislation that lawmakers are looking to pass ahead of the midterms.
Wyden told Senate Minority Leader John Thune and Senate Majority Leader Charles Schumer to preserve a section of the CLARITY Act known as the Blockchain Regulatory Certainty Act (BRCA), according to a letter shared by Crypto in America podcast co-founder Eleanor Terrett on Wednesday.
“Developers who make and release software that allows people to manage their own digital assets — and, critically, where the developer does not control user assets — should not be treated as money transmitters solely because they create or publish software,” Wyden wrote.
The letter comes after certain groups and lawmakers opposed the BRCA. A group of law enforcement organizations and a coalition of Catholic organizations last month argued it could create gaps in the oversight of illicit activity.
Meanwhile, crypto groups have urged the Senate to keep the section intact, arguing that developers of non-custodial technology can’t control user funds and should not be treated as financial intermediaries.
Negotiations over provisions in the bill are ongoing. Senate leaders are pushing for the bill to be passed this month, and will want to bring to the floor a bill that has wide support to avoid prolonged debate.
BRCA needed for US to remain competitive: Wyden
In his letter, Wyden argued that treating crypto 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 BRCA reflects guidance from the Financial Crimes Enforcement Network and gives 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.”
“Smart policy will empower law enforcement to do its job and facilitate innovation at the same time,” Wyden wrote. “As the Senate continues its consideration of the Clarity Act, I urge you to include the Blockchain Regulatory Certainty Act in any legislative package.”
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The Senate has other provisions in the CLARITY Act that are at issue before it can go to a floor vote, with some lawmakers calling for tighter ethics provisions on government officials’ involvement in crypto after US President Donald Trump revealed he made $1.4 billion from his crypto interests last year.
Lawmakers who back the bill want to pass it before this Congress is out to avoid having to reintroduce it into a new Congress next year.
However, the timeline for the bill to pass before the midterm elections in November is tightening, as Congress will also take a monthlong recess in August.
That tight timeline saw Galaxy Digital recently cut its odds of the CLARITY Act becoming law this year to 50%, saying that the Senate is running out of time to move on the bill before its August recess.
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