Sen. Wyden urges Senate leaders to preserve contested blockchain developer protections in broader crypto bill

Democratic Sen. Ron Wyden is urging Senate leaders to ensure a contested provision protecting blockchain software developers remains in a sweeping cryptocurrency market structure bill as negotiations over the legislation continue.

In a letter sent this week to Senate Majority Leader John Thune and Senate Democratic Leader Charles Schumer, Wyden called on leadership to preserve Section 604, known as the Blockchain Regulatory Certainty Act (BRCA), in future versions of the broader Clarity Act.

BRCA is a standalone bill that has been incorporated into the Clarity Act and has emerged as a key point of contention as lawmakers try to pass broader crypto legislation. The provision creates a safe harbor for non-custodial developers, clarifying that they are not money transmitters. Sen. Cynthia Lummis, R-Wyo., introduced the bill earlier this year, with Wyden as the only cosponsor.

"Smart policy will empower law enforcement to do its job and facilitate innovation at the same time," Wyden said in the letter obtained by The Block. "As the Senate continues its consideration of the Clarity Act, I urge you to include the Blockchain Regulatory Certainty Act in any legislative package."

That section has support from much of the crypto industry, who say it provides much-needed legal certainty for software developers and helps prevent innovation from moving offshore. Meanwhile, some law enforcement groups, and even Catholic leaders, have warned that it could weaken safeguards to combat human trafficking and could hinder investigations.

Wyden pushed back on criticism of the provision in his letter and said it would bring together policy from the Department of Justice and the Financial Crimes Enforcement Network and make sure that resources are focused on bad actors operating businesses that are unlicensed money transmitters.

"The provision also includes a common-sense exception that any non-custodial developers found to be transferring or using funds originating from illicit activity are not protected, ensuring that bad actors can still be held accountable while avoiding the unintended consequence of mistreating neutral software developers as financial intermediaries," Wyden said in the letter.

The debate over BRCA has become one of the bigger unresolved issues as lawmakers work to advance the Clarity Act. Another sticking point has been whether additional ethics guardrails are needed to address potential conflicts of interest involving lawmakers and executive branch officials, like President Donald Trump, with ties to the digital asset industry.

Days are dwindling to get enough floor time as lawmakers will leave Washington in August, and November elections quickly approach.