A revised version of the Blockchain Regulatory Certainty Act, now moving toward a Senate vote alongside the Clarity Act, would give non-custodial blockchain developers and infrastructure providers stronger protection from being treated as money transmitters under federal registration and anti-money-laundering rules.

According to Coin Center, the new draft makes meaningful progress on the regulatory side by codifying a control-based standard for developers who do not control user funds. But the group says the latest language also removes an earlier, more explicit protection against criminal liability under 18 U.S.C. § 1960, leaving a key legal question unsettled.

What the revision would do

The updated BRCA says a qualifying “non-controlling blockchain developer or provider” should not be treated as a money transmitting business under the relevant statutes or as a specified financial institution. It also extends similar protection to software development, self-custody, and infrastructure activity that would otherwise risk being swept into registration requirements.

Coin Center argues that this approach reflects the control-based framework the Financial Crimes Enforcement Network described in 2019. In practice, that would help prevent developers who cannot access or direct customer funds from being subjected to anti-money-laundering duties they have no practical way to carry out.

The criminal-law protection that was removed

The main point of concern for Coin Center is what the revised bill no longer says. Earlier BRCA language had included explicit protection from criminal liability under 18 U.S.C. § 1960, the federal statute that can be used in cases involving unlicensed money transmitting businesses.

Coin Center said the revised bill should still strengthen arguments against prosecutions under subsections (b)(1)(A) and (B), because it makes clearer that non-controlling developers are not money transmitters for the purposes of the covered regulatory framework. Even so, the organization said subsection (C) remains unresolved, and that omission leaves open criminal-law risk that the prior version tried to address directly.

Why subsection (C) still matters

The unresolved issue is whether prosecutors could still argue that a non-controlling developer is engaged in “money transmitting” under Section 1960 even if that developer does not actually handle user funds. Coin Center said the Justice Department has brought cases under subsection (C) even where licensing questions were not clearly at issue, which is why the removal of the earlier safe harbor is significant.

In Coin Center’s view, the revised BRCA would at least establish an important baseline rule: building or providing software and non-custodial infrastructure, by itself, should not make someone a money transmitter. But whether that principle is enough to block future Section 1960 theories is not settled by the new text and may instead have to be tested in court.

Broader constitutional concerns and next step

Coin Center also pointed to constitutional concerns tied to liability for publishing code, including First Amendment protections for speech. The group said it will keep pressing for clearer statutory language that protects people who merely develop blockchain software, publish code, or operate non-custodial infrastructure from criminal exposure.

For now, Coin Center describes the revision as substantial regulatory progress, but not a complete fix. If the bill advances, the remaining dispute will be whether lawmakers revisit the missing criminal-law protection or leave courts to decide how Section 1960 applies to developers with no control over user assets.

Source: www.coincenter.org