Senators Cynthia Lummis (R-WY) and Ron Wyden (D-OR) have reintroduced bipartisan legislation to clarify when and how crypto developers and infrastructure providers may be treated as money transmitters under federal law.
“Blockchain developers who have simply written code and maintain open-source infrastructure have lived under threat of being classified as money transmitters for far too long,” Lummis said in a statement released Monday, adding that such a designation “makes no sense when they never touch, control, or have access to user funds.”
“Forcing developers who write code to follow the same rules as exchanges or brokers is technologically illiterate and a recipe for violating Americans’ privacy and free speech rights,” Wyden said.
Observers speaking with Decrypt say the proposal draws a clearer boundary between writing software and controlling user funds.
“This is long overdue progress. Writers of self-custody code should never be treated as banks or exchanges since we don't control the funds,” Mehow Pospieszalski, CEO of wallet infrastructure platform American Fortress, told Decrypt.
Developer liability is “one of those issues that can quietly derail everything else if it’s left unresolved,” Jakob Kronbichler, CEO of on-chain credit marketplace Clearpool, told Decrypt, adding that the proposal “looks like an attempt to put a clear marker down early.”
By reintroducing it now, Lummis and Wyden “are clearly trying to shape the direction of the larger debate,” he said.
Asked how the DOJ’s actions in the Samourai Wallet and Tornado Cash cases have shaped the discussion, Kronbichler said the issue has taken on greater weight for policymakers and industry observers.
“Those cases turned what was previously a theoretical concern into a concrete one. For a long time, developer liability was discussed as a ‘what if’ scenario. Now there are real prosecutions that developers and founders are watching closely,” he said.
Such a predicament “creates urgency,” given how it “forces lawmakers to confront whether existing frameworks are being applied in ways they never intended,” he added.
What matters is no longer just about “avoiding regulation,” but now extends to “making sure accountability follows control, rather than attaching liability simply because someone wrote software,” he said
