US Lawmakers Introduce Bill to Protect Blockchain Developers from Prosecution

A bipartisan group of members in the US House of Representatives has introduced new legislation aimed at shielding blockchain developers from criminal liability when they do not control or custody user funds.

Representatives Scott Fitzgerald, Ben Cline, and Zoe Lofgren unveiled the Promoting Innovation in Blockchain Development Act to clarify how Section 1960 of federal law should apply to digital asset activity. The statute currently governs the prohibition of illegal money transmitting businesses.

The proposed bill would specify that criminal liability under Section 1960 applies only to individuals or entities that exercise custody or control over another person’s digital assets. Supporters argue that writing or publishing open-source code should not qualify someone as a financial intermediary.

Industry Groups Back Developer Protection Efforts

The Blockchain Association described the legislation as a significant step toward encouraging domestic innovation. The DeFi Education Fund said the measure could help prevent prosecutions similar to that of Roman Storm, who was found guilty in 2025 of operating an unlicensed money transmitting business.

Parallel efforts are also underway in the Senate. Senators Cynthia Lummis and Ron Wyden previously introduced the Blockchain Regulatory Certainty Act to provide similar protections.

While broader digital asset legislation remains under review, the House proposal reflects ongoing debate in Washington over how to balance innovation with enforcement in the crypto sector.

Disclaimer

This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.