U.S. Democratic Senator Ron Wyden has called for the inclusion of provisions to protect blockchain software developers in the Clarity Act, a proposed legislation aimed at structuring the virtual asset market.
According to The Block on Wednesday, Senator Wyden sent a letter this week to Senate Republican Leader John Thune and Democratic Leader Chuck Schumer, requesting that Section 604 of the Clarity Act, known as the Blockchain Regulatory Clarity Act (BRCA), be incorporated into future amendments.
The BRCA, initially proposed as a separate bill, has now been integrated into the Clarity Act.
At its core, the BRCA aims to ensure that non-custodial blockchain developers are not classified as money transmitters. Republican Senator Cynthia Lummis introduced the bill earlier this year, with Wyden as the sole Democratic co-sponsor.
Senator Wyden emphasized that through prudent policy-making, it’s possible to both facilitate innovation and enable law enforcement to fulfill its duties. He stressed the importance of including the BRCA in the Clarity Act deliberations.
The virtual asset industry has thrown its support behind this provision, arguing that it offers essential legal clarity for software developers and could prevent innovative firms from relocating overseas.
However, some law enforcement agencies and conservative groups have voiced concerns that this provision might undermine crime prevention measures, particularly in combating human trafficking, and potentially complicate investigations.
Addressing these criticisms, Senator Wyden highlighted that the provision also excludes non-custodial developers who transfer or use illegal funds from protection. He argued that this approach allows for the punishment of bad actors while avoiding the unintended consequence of treating neutral software developers as financial intermediaries.
Meanwhile, with Congress set to recess next month and midterm elections looming in November, concerns are mounting about the diminishing window of opportunity to address the Clarity Act.