Sen. Cynthia Lummis (R-Wyo.) and Sen. Ron Wyden (D-OR) put forth a bipartisan bill on Monday with the intent to shield blockchain developers from being categorized as money transmitters under federal law.
‘Stop Treating Software Developers Like Banks’
The Blockchain Regulatory Certainty Act aims to exempt “non-controlling” software developers and infrastructure providers from federal money transfer requirements.
Non-controlling developers are defined as those who develop or maintain blockchain-based ledgers but lack the legal authority to control transactions without third-party approval.
The bill also designated offering hardware or software for customer self-custody solutions and infrastructure support to maintain distributed ledger services as “protected” activities.
“This bill gives our developers the clarity they need to build the future of digital finance without fear of prosecution for activities that pose no money laundering risk,” said Lummis, Senate Banking Digital Assets Subcommittee Chair
“It’s time to stop treating software developers like banks simply because they write code,” the pro-cryptocurrency lawmaker added.
Boon For Blockchain Developers?
The move follows the Justice Department’s decision to soften its stance toward developers who create decentralized platforms for transmitting cryptocurrencies without criminal intent
Roman Storm, co-founder of cryptocurrency mixing platform Tornado Cash, was convicted last year for operating an unlicensed money transmitting business.
Prosecutors said that Storm deliberately profited from criminal use of the protocol, but the defense argued that non-custodial software developers should not be classified as financial intermediaries.
Edward Snowden, the former CIA contractor turned whistleblower, publicly backed Storm, emphasizing that privacy is not a crime.
A money transmitting business provides financial services involving the transfer of funds on behalf of the public. These activities are regulated by federal law, specifically the Bank Secrecy Act.
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
Photo courtesy: alfernec on Shutterstock.com
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