Code vs. Compliance: The Existential Risk Facing Crypto Developers—and the Bill Trying to Save Them

Writing open-source blockchain code risks being treated as a financial intermediary under U.S. law—a paradox that the Blockchain Regulatory Certainty Act of 2026 aims to resolve.

Two senators introduced the bill to clarify that 'non-controlling' blockchain developers and infrastructure providers should not be classified as money transmitters under federal law. The bill defines 'non-controlling' as entities without unilateral authority to move user funds, aiming to separate software publishing from financial custody.

"Threatens to criminalize Americans offering non-custodial crypto asset software services" (from 2024 letter to Attorney General Merrick Garland by Sens. Cynthia Lummis and Ron Wyden). The proposal responds to legal ambiguity surrounding open-source blockchain tools, where developers face potential liability under money-transmission laws despite not holding user funds.

The bill seeks to formalize a distinction regulators already informally apply but lacks statutory clarity, addressing fears raised by cases like the Tornado Cash prosecution.

The bill is framed as a standalone measure but operates as part of broader legislative efforts to define crypto's regulatory framework, including debates over DeFi, stablecoins, and AML compliance.

By insulating developers from liability while preserving enforcement against custodial actors, the legislation attempts to balance innovation with regulatory oversight.

⚠️ LEGAL DISCLAIMER: This article is for informational purposes only and does not constitute financial or investment advice.