US Lawmakers Introduce Bill to Protect Blockchain Developers From Criminal Prosecution
A bipartisan coalition in the U.S. House of Representatives has introduced legislation designed to shield software developers from criminal liability when they build decentralized technology without controlling users’ digital assets. The move addresses growing concerns within the crypto industry that existing financial regulations are being misapplied to stifle innovation.
On Thursday, Representatives Scott Fitzgerald (R-WI), Ben Cline (R-VA), and Zoe Lofgren (D-CA) announced they are sponsoring the Promoting Innovation in Blockchain Development Act. The bill seeks to amend the interpretation of federal law that has, in recent high-profile cases, been used to prosecute developers as if they were operating illegal money transmitting businesses.
Clarifying the Scope of Money Transmitter Laws
The core of the legislation amends the application of Section 1960 of U.S. federal law, which prohibits unlicensed money transmitting businesses. The bill would explicitly state that this statute applies only to entities or individuals that have custody or control over others’ digital assets. This clarification aims to create a legal safe harbor for developers who write open-source code or maintain neutral blockchain protocols, distinguishing them from custodial financial intermediaries like exchanges.
Industry Voices Throw Support Behind the Measure
The proposal has already garnered public endorsement from prominent crypto advocacy groups. The Blockchain Association called the bill a “critical step” to encourage innovation and retain developer talent within the United States. Similarly, the DeFi Education Fund (DEF) stated the legislation would likely prevent future prosecutions resembling those against Tornado Cash developer Roman Storm and the founders of Samourai Wallet.
“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,” a DEF representative commented.
Source: DeFi Education Fund
Uncertain Impact on Ongoing and Past Cases
A significant unanswered question is whether the law, if passed, would apply retroactively to halt existing prosecutions. Roman Storm was found guilty in August 2025 of running an unlicensed money transmitter business. In a separate case, Samourai Wallet founders Keonne Rodriguez and Will Lonergan Hill pleaded guilty in July to similar charges and were subsequently sentenced to five and four years in prison, respectively. As of the bill’s introduction, Storm had not yet been sentenced on those charges and still faced two additional counts for which a retrial was possible.
Senate Moves on Parallel Developer Protection Bill
The legislative effort in the House aligns with a companion bill already advancing in the Senate. In January, Senators Cynthia Lummis (R-WY) and Ron Wyden (D-OR) introduced the Blockchain Regulatory Certainty Act. That Senate bill similarly aims to clarify that developers who merely write code or maintain blockchain networks do not meet the legal definition of a money transmitter and thus cannot be held criminally liable as such.
Meanwhile, the Senate is separately considering the broader CLARITY Act (Comprehensive Legislation for the Advancement of Regulated Technology and Digital Assets), a market structure bill passed by the House in July 2025. The CLARITY Act cleared the Senate Agriculture Committee in January but has not yet been scheduled for markup by the Senate Banking Committee. It remains unclear if the final version of that larger bill will incorporate the specific developer liability protections, which face opposition from some senators wary of loosening financial regulations.
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