Senate Strips Criminal Protections from Revised Blockchain Regulatory Certainty Act
Key Summary
The United States Senate scheduled a critical vote on the Clarity Act following last-minute legislative revisions that stripped explicit criminal liability protections from the Blockchain Regulatory Certainty Act. According to policy dockets reviewed by market researchers, the updated text preserves regulatory exemptions under the Bank Secrecy Act and FinCEN rules for non-controlling developers but eliminates immunities under 18 U.S.C. § 1,960. Legal teams representing digital asset firms noted that open-source developers building non-custodial tools still face potential criminal exposure while courts evaluate lingering statutory ambiguities.
Key Bullets
- The Senate scheduled a legislative vote on the Clarity Act after drafters altered the Blockchain Regulatory Certainty Act to secure 60 votes.
- Section 10604(c) of the revised bill exempts non-controlling blockchain developers from FinCEN registration rules and Bank Secrecy Act obligations.
- Lawmakers removed explicit statutory protections against criminal liability under 18 U.S.C. § 1960 for individuals publishing open-source software.
- Coin Center maintains an active lawsuit against the Department of Justice to secure judicial clarity on criminal liability for non-custodial software code.
Senate Prepares Clarity Act Vote After Revisions
The Senate scheduled a legislative vote on the Clarity Act Tuesday following last-minute text modifications designed to secure 60 votes for passage. Publicly released draft documents show that negotiators adjusted the Blockchain Regulatory Certainty Act to retain specific regulatory shields while discarding key criminal liability provisions championed by policy advocates.
The updated legislative text codifies the 2019 FinCEN guidance framework. Qualifying non-controlling developers and infrastructure operators avoid classification as money transmitters under Title 31 regulations.
Criminal Liability Under Section 1,960 Remains Unresolved
Negotiators excised explicit protections shielding developers from prosecution under 18 U.S.C. § 1,960. Previous iterations of the bill expressly barred federal prosecutors from targeting open-source contributors under the statute prohibiting unlicensed money transmission businesses.
The removal leaves a critical gap for software authors. Federal prosecutors previously indicted developers of privacy tools such as Tornado Cash and Samourai Wallet under subsection (C) of the statute. That specific statutory prong does not strictly require proof of a failed FinCEN registration to sustain a criminal charge.
Prosecutors maintained enforcement authority. The Department of Justice intends to pursue digital asset cases despite separate internal memos restricting unwitting regulatory violation charges.
Litigation Shifts to Federal Courts and Coin Center
Coin Center fellow Michael Lewellen filed a separate federal lawsuit against the Department of Justice seeking a declarative judgment. The active litigation aims to confirm that publishing non-custodial code does not constitute criminal conduct.
Legal analysts observed that the omission of Section 1,960 protections places the burden squarely on federal judges. Courts must now decide whether writing software infrastructure exposes developers to felony prosecution.
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