Do Not Sacrifice Developer Protections in Market Structure
Coin Center's letter to members of the Senate Banking Committee on the importance of developer protections under the Blockchain Regulatory Certainty Act.
The Blockchain Regulatory Certainty Act (BRCA) must be an integral part of any market structure regime. There is no sustainable blockchain ecosystem in the US if developers who write or deploy neutral software must operate under the constant threat that they will be prosecuted as unlicensed money transmitters for that conduct alone.
The BRCA narrowly defines a category of actors engaged in what should universally be considered lawful activity: writing and publishing code, and running neutral software. This is the same type of activity conducted every day by internet service providers, cloud hosting services, router manufacturers, browser developers, and email providers. We do not threaten those actors with prison when a criminal uses the internet, sends an email, routes traffic, or uploads files. The same principle must apply to blockchain developers.
The BRCA ensures that the next Satoshi Nakamoto, Vitalik Buterin, or Hayden Adams is able to develop the very systems that a market structure bill is designed to promote and protect. It clarifies that developers will not face civil or criminal liability as money transmitters solely because they deploy or maintain software that enables peer-to-peer value exchange. That activity — publishing and running software that allows individuals to transact without a trusted intermediary — is at the heart of what crypto represents. We value these systems precisely because of their neutrality and public availability. It is untenable to suggest that toolmakers must somehow design their software only in the manner preferred by the government to avoid prosecution when others misuse it.
The BRCA does not shield bad actors. It does not create a prosecution gap. Existing criminal statutes remain fully available where there is evidence of knowledge and intent to facilitate unlawful conduct. If a developer knowingly agrees to help launder criminal proceeds, prosecutors may bring conspiracy charges under 18 U.S.C. § 1956(h). If an individual conducts financial transactions involving criminal proceeds with intent to conceal or promote unlawful activity, § 1956(a)(1) applies. If a person knowingly engages in transactions exceeding $10,000 in criminally derived property, § 1957 applies. If someone aids and abets money laundering, 18 U.S.C. § 2 is also available. Importantly, these statutes focus on conduct, agreement, and intent, not on the mere publication of code.
Similarly, 18 U.S.C. § 1960 remains fully operative for those who truly operate custodial businesses that accept and transmit funds for customers without proper licensing or AML compliance. The BRCA preserves that authority. It simply ensures that prosecutors must demonstrate the core element that defines money transmission: control over customer funds. By doing so, the BRCA codifies long-held guidance from FinCEN and draws a necessary line between custodial financial intermediaries and neutral software infrastructure.
We recognize that not everything labeled “decentralized” is genuinely so. There are projects that unilaterally control user funds while attempting to evade regulatory obligations through complex organizational structures or marketing language. Regulators and prosecutors should be fully resourced to pierce that decentralization veil and bring cases where an individual is truly operating an unlicensed money transmitting business or knowingly laundering funds.
The Senate Banking draft itself already provides a constructive path forward on this issue. Section 301 requires rulemaking to distinguish between genuinely decentralized protocols and “non-decentralized” trading protocols where a person or group under common control retains authority to materially alter functionality or restrict use. Under that framework, only those non-decentralized protocols may give rise to regulatory obligations under the securities laws or the Bank Secrecy Act. That approach, which would benefit from some changes, appropriately targets centralized intermediaries regardless of “decentralization” labeling without risking extension to neutral software publication. The BRCA works in concert with Section 301 to preserve that line.
The BRCA is not a partisan add-on or a late-stage negotiating lever. A bipartisan version was introduced in the Senate by Senators Wyden and Lummis. The House version, introduced by Representatives Emmer and Torres, has been advanced in multiple Congresses and most recently passed as part of the Clarity Act with an overwhelming bipartisan majority. The core principle that non-custodial developers and software publishers should not be treated as money transmitters absent custody or agency has consistently drawn support across party lines.
Statutory ambiguity should not be allowed to convert otherwise constitutionally protected conduct, such as writing and publishing code, into criminal activity. The BRCA must remain intact to prevent that ambiguity from persisting. Removing or weakening it would not strengthen market structure legislation; it would inject instability at its core. Developers would face open-ended criminal exposure untethered from core elements of money transmission, such as custody or control over customer funds. That uncertainty will not deter bad actors — it will deter responsible builders from operating in the United States.