There’s a New DeFi Bill in Congress—What Does That Mean for Crypto Market Structure?
A bipartisan group of U.S. lawmakers introduced the Promoting Innovation in Blockchain Development Act to exempt decentralized software developers from criminal liability under U.S. code 1960, which defines illegal money transmission. This responds to recent prosecutions of developers for creating privacy-focused crypto tools like Tornado Cash and Samourai Wallet; those developers argued that, since they lacked control over user funds, they should not be categorized as money transmitters. The new bill specifies that only those exercising control over currency would be liable, aiming to protect developers who build neutral, non-custodial blockchain software. While a pending crypto market structure bill also seeks to address developer liability under code 1960, it would not formally amend the statute, instead clarifying that non-controlling developers should not be targeted. Debate continues around other issues in the market structure bill, especially stablecoin rewards and DeFi regulations, but sources say disagreements on DeFi are unlikely to derail the broader legislation. Lawmakers warn the bill must progress soon, or risk stalling ahead of the fall election cycle.
