- A bipartisan group of lawmakers introduced a bill Thursday to protect non-custodial crypto developers from criminal prosecution.
- The Promoting Innovation in Blockchain Development Act would amend U.S. criminal code 1960, used to convict developers behind Tornado Cash and Samourai Wallet.
- While similar protections may appear in a broader crypto market structure bill, passage this year is uncertain.
- The DeFi Education Fund called the new bill “critically important for engineers” who build neutral technology.
A bipartisan group of House lawmakers, including Reps. Scott Fitzgerald (R-WI), Ben Cline (R-VA), and Zoe Lofgren (D-CA), introduced a bill on Thursday aiming to shield decentralized software developers from criminal liability. This new legislation directly confronts a U.S. criminal statute used to prosecute multiple crypto privacy tool creators last year.
Consequently, the Promoting Innovation in Blockchain Development Act seeks to amend U.S. code 1960, which defines an illegal money transmitting business. It would ensure the law applies only to individuals who “exercise control over currency,” providing a safe harbor for developers of non-custodial software.
This move follows high-profile convictions and guilty pleas secured under that code. An Ethereum developer for Tornado Cash was found guilty by a Manhattan jury, while two Bitcoin developers behind Samourai Wallet are currently serving federal prison sentences.
The DeFi Education Fund, an industry advocacy group, strongly endorsed the bill. “It makes it clear that 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,” the group stated.
However, more limited language addressing developer liability is also being debated within a stalled comprehensive crypto market structure bill. Sources indicate disagreements over stablecoin rewards and provisions regarding President Trump’s crypto ventures remain larger obstacles than the DeFi language.
Meanwhile, lawmakers have warned that the broader legislation needs significant progress in the coming weeks to avoid being sidelined. The political calendar ahead of November’s midterm elections threatens to halt congressional activity, potentially dooming both bills.
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