US Lawmakers Act to Shield Blockchain Devs From Prosecution

US lawmakers introduced the Promoting Innovation in Blockchain Development Act on Thursday, a bipartisan bill designed to protect blockchain developers from criminal prosecution under federal money transmitter statutes. Representatives Scott Fitzgerald, Ben Cline, and Zoe Lofgren sponsored the legislation, which would narrow the scope of Section 1960 to apply solely to entities that maintain custody or control of others' digital assets.

What Does the Blockchain Developer Protection Bill Do?

The Promoting Innovation in Blockchain Development Act would amend Section 1960 of US federal law so that prohibitions against illegal money transmitting businesses cover only those who exercise custody or control over other people's crypto assets. Developers who write code without handling user funds would not face prosecution as unlicensed money transmitters under the proposed change.

At least two major crypto advocacy organizations publicly backed the measure. The Blockchain Association described it as a "critical step" toward encouraging US-based development, according to a statement released Thursday. The DeFi Education Fund (DEF) also endorsed the bill, arguing it would draw a firm legal line between neutral software creators and regulated financial intermediaries.

[The bill] makes it clear software developers who do not take custody of or control other people's money can build neutral technology, here at home, without worrying about being criminally prosecuted as if they are a financial intermediary.

— DeFi Education Fund

Tornado Cash and Samourai Wallet Cases Loom Large

The DeFi Education Fund said the legislation would likely halt prosecutions similar to the cases against Tornado Cash developer Roman Storm and the creators of the Samourai Wallet. Storm was found guilty of operating an unlicensed money transmitter business in August 2025, though he has yet to be sentenced or face a potential retrial on two remaining charges as of Thursday.

Samourai Wallet founders Keonne Rodriguez and Will Lonergan Hill pleaded guilty to comparable charges in July and received sentences of five and four years in prison, respectively. It remains unclear whether the proposed bill, if enacted, would retroactively affect previously filed cases against developers.

Senate Pushes Parallel Legislation

Lawmakers in the upper chamber have advanced their own developer protection effort. In January, Senators Cynthia Lummis and Ron Wyden introduced the Blockchain Regulatory Certainty Act, which would establish that developers who write code or maintain blockchain networks do not meet the legal requirements for criminal liability as unlicensed money transmitters. Both chambers now have active bills targeting the same core issue, reflecting growing bipartisan momentum to redefine how federal law treats software creators in the crypto space.

What Happens Next for Crypto Regulation?

The broader legislative picture remains complex. The CLARITY Act, a comprehensive digital asset market structure bill, passed the Senate Agriculture Committee in January after clearing the House in July 2025. However, it has yet to undergo markup in the Senate Banking Committee.

Whether any final legislation emerging from Congress will include explicit protections for blockchain developers remains an open question. Some lawmakers have pushed back on the provisions, creating uncertainty about whether the developer shield will survive the full legislative process.