The bipartisan Blockchain Regulatory Surety Act would exempt non-custodial crypto developers from money transmission regulations, aiming to reduce legal risk and keep builders in the US.
Summary
- Senators Cynthia Lummis and Ron Wyden introduced the Blockchain Regulatory Surety Act to clarify that non-custodial developers are not money transmitters.
- The bill protects activities such as writing code, maintaining decentralized networks, and building self-management tools when developers do not have unilateral control over user assets.
- Industry groups say clearer boundaries between infrastructure builders and middlemen could reduce fears of criminal liability and stem the flow of projects abroad.
Two U.S. Senators introduced bipartisan legislation on January 12, 2026, aimed at providing regulatory clarity for cryptocurrency developers by exempting non-custodial builders from money transmitter licensing requirements.
Lummis-Wyden bill to protect non-custodial crypto developers
Senators Cynthia Lummis, a Republican, and Ron Wyden, a Democrat, have proposed the Blockchain Regulatory Surety Act to address the regulatory uncertainty facing developers in the digital asset sector, according to statements from lawmakers.
The bill aims to exempt cryptocurrency developers that do not process or control user funds from federal and state money transmission regulations. Under the proposed legislation, creating computer software, writing code or maintaining blockchain networks would not entail licensing requirements.
The measure defines developers who do not have unilateral control over assets as non-money transmitters, creating a legal distinction between infrastructure development and financial activities in escrow. Protected activities include blockchain software development, decentralized network maintenance, self-management tools and infrastructure services.
Senator Lummis stated that developers have faced regulatory threats despite not having a guardianship role, arguing that money transmitter classifications limit innovation without reducing money laundering risk. Senator Wyden cited privacy and freedom of speech concerns and argued that applying rules designed for exchange to code writers reflects a misunderstanding of the technology.
Blockchain developers have raised concerns about potential criminal liability for the use of their software by third parties, according to industry observers. Some projects have moved their operations abroad to reduce regulatory risk, the senators noted.
The legislation is in response to increased enforcement actions regarding non-custodial protocols that have alarmed developers in recent years. The bipartisan sponsorship reflects an unusual alignment on cryptocurrency policy between the two major parties.
The bill is currently standing as standalone legislation in the Senate, but could be included in broader market structure proposals, according to sources in Congress. Negotiations on the final packaging of the legislation continue.
Industry participants have expressed support for a clearer distinction between developers and financial intermediaries, saying the bill could reduce compliance uncertainty and boost domestic blockchain development. Supporters say the proposal aims to maintain American competitiveness in digital finance by retaining talent and investment.
The legislation does not limit the regulation of cryptocurrency exchanges or brokers. Senator Wyden emphasized that enforcement of tax and trade rules would continue, noting that the bill is intended to limit the scope of regulation rather than weaken oversight.
The measure reflects the principle of technology neutrality, with lawmakers arguing that regulation should focus on function rather than code creation, in line with previous internet policy approaches.
The bill’s future depends on broader negotiations in the Senate, but its introduction signals lawmakers’ willingness to update regulatory frameworks for emerging financial technologies.
