Senators Lummis and Wyden push bill to exempt non-custodial blockchain developers from money transmitter laws

Key Takeaways

• Senators Cynthia Lummis and Ron Wyden introduced a bill to exempt non-custodial blockchain developers from being classified as money transmitters.
• The bill clarifies that developers who do not have control over user funds should not fall under federal money transmitter laws.

US Senators Cynthia Lummis and Ron Wyden on Monday unveiled the Blockchain Regulatory Certainty Act, bipartisan legislation that would exempt non-custodial blockchain developers and infrastructure providers from federal money transmitter rules.

The bill aims to protect innovation, maintain consistency with federal guidance, and prevent non-custodial developers from being treated like banks or financial intermediaries.

Under the proposal, developers who write software, maintain distributed ledgers, or provide supporting infrastructure, but do not control users’ funds, would not be treated as money transmitters under federal law.

Wyden framed the issue in terms of constitutional rights. “Forcing developers who write code to follow the same rules as exchanges or brokers is technologically illiterate and a recipe for violating Americans’ privacy and free speech rights,” he said.

The legislation also seeks to harmonize federal standards with state laws while offering regulatory certainty to stimulate the US digital finance sector.

Under current law, many developers face regulatory uncertainty that has driven innovation offshore and subjected them to conflicting state rules.

The legal threshold for developer liability reached a turning point in the recent prosecutions of Tornado Cash and Samourai Wallet. In these cases, prosecutors successfully argued that maintaining and governing code can qualify developers as ‘financial institutions,’ making them subject to the Bank Secrecy Act in the same way as traditional banks.

Tornado Cash co-founder Roman Storm was convicted in 2025 of conspiracy to operate an unlicensed money transmitting business, while Samourai Wallet founders Keonne Rodriguez and William Lonergan Hill pled guilty to similar charges.

Members of the crypto community argue that these outcomes represent a dangerous precedent, effectively criminalizing the act of publishing privacy-preserving software.