Key Takeaways
- Sen. Ron Wyden urged Senate leaders to keep the Blockchain Regulatory Certainty Act (BRCA) in the final version of the CLARITY Act.
- The BRCA would clarify that developers who simply publish non-custodial blockchain software are not subject to money transmitter rules.
- The Bank Policy Institute argues that the current CLARITY Act could create anti-money laundering gaps.
Sen. Ron Wyden is urging Senate leaders to preserve the Blockchain Regulatory Certainty Act (BRCA) as lawmakers negotiate the final version of the CLARITY Act, adding new momentum to the debate over US crypto legislation ahead of Congress’s August deadline.
In a letter addressed to Senate Majority Leader John Thune and Minority Leader Chuck Schumer, the Oregon Democrat argued that the BRCA would codify existing federal policy by ensuring that non-custodial software developers are not treated as money transmitters simply for publishing software.
At the same time, he stressed that the provision would continue to allow the Department of Justice (DOJ) and the Financial Crimes Enforcement Network (FinCEN) to pursue illicit actors.
Wyden’s intervention comes as lawmakers face growing pressure from both the crypto industry and financial policy groups over the final shape of the CLARITY Act, which seeks to establish a comprehensive federal framework for digital assets.
Wyden Defends Protections for Non-Custodial Developers
Wyden asked Senate leadership to preserve the BRCA language approved by the Senate Banking Committee in any version of the CLARITY Act that reaches the Senate floor.
The request arrives amid uncertainty over whether key law enforcement organizations will support the current language or demand changes before backing the broader legislation.
The outcome could also influence support from Democratic senators, including Catherine Cortez Masto and Mark Warner.
Wyden argued that the BRCA does not weaken anti-money laundering enforcement but instead clarifies the distinction between software developers and financial intermediaries.
Under the proposal, developers who create and publish non-custodial blockchain software would not automatically fall under money transmitter rules solely because others use their code.
However, authorities would retain the power to investigate and prosecute individuals or organizations engaged in criminal activity.
Wyden has long supported this approach. He previously co-sponsored the standalone BRCA alongside Sen. Cynthia Lummis, one of Congress’s leading advocates for digital asset legislation.
Pressure Builds Ahead of the August Deadline
Wyden’s letter comes as lawmakers and industry groups intensify calls to move the CLARITY Act through the Senate before Congress begins its August recess.
Commodity Futures Trading Commission Chairman Michael S. Selig said that passing the legislation would replace the current patchwork of state rules with a single federal framework for digital assets.
Speaking on Fox Business, Selig said the negotiations have experienced “mission creep,” with debates over ethics and unrelated issues distracting lawmakers from establishing clear standards for crypto markets and consumer protection.
Lummis echoed the urgency, warning on X that the CLARITY Act could represent the final opportunity to enact comprehensive digital asset legislation before the end of the decade.
“If we fail to pass the CLARITY Act, we are ensuring another country will write the rules for digital assets, and we spend the next decade catching up,” she wrote.
Sen. Bernie Moreno also urged Senate leadership to bring the bill to the floor this month, while advocacy organization Stand With Crypto has encouraged supporters to contact senators when they return from recess on July 13.
The group noted that the Senate effectively faces an August 7 deadline before lawmakers leave Washington for the next recess.
AML Debate Emerges as Key Sticking Point
Despite growing bipartisan support for regulatory clarity, the legislation continues to face criticism for its approach to anti-money laundering requirements.
In a policy paper, the Bank Policy Institute argued that existing federal law already provides the Treasury with broad authority to regulate much of the crypto ecosystem under the Bank Secrecy Act.
Rather than creating stronger safeguards, the organization warned that the current version of the CLARITY Act could leave significant gaps by exempting certain digital asset service providers, decentralized finance entities, and unhosted wallet providers from Bank Secrecy Act obligations.
The institute also argued that Congress should explicitly authorize the Treasury to sanction cryptocurrency mixers, tumblers, and similar tools that facilitate money laundering, terrorist financing, and sanctions evasion.
According to the BPI, weakening existing AML obligations could encourage illicit actors to migrate to less-regulated areas of the crypto ecosystem rather than improving oversight.
The contrasting positions illustrate the delicate balance lawmakers are attempting to strike. Supporters of the BRCA argue that protecting non-custodial software developers encourages innovation without limiting law enforcement’s ability to target criminals.
Critics, however, warn that any exemptions must avoid creating new regulatory blind spots that could be exploited by bad actors.
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Giuseppe Ciccomascolo began his career as an investigative journalist in Italy, where he contributed to both local and national newspapers, focusing on various financial sectors.
Upon relocating to London, he worked as an analyst for Fitch's CapitalStructure and later as a Senior Reporter for Alliance News. In 2017, Giuseppe transitioned to covering cryptocurrency-related news, producing documentaries and articles on Bitcoin and other emerging digital currencies. He also played a pivotal role in establishing the academy for a cryptocurrency exchange website. Crypto remained his primary area of interest throughout his tenure as a writer for ThirdFloor.
