Blockchain Liability Shield Stalls Crypto Market Structure Bill Negotiations

Negotiations over a broad U.S. cryptocurrency market structure bill have reached a critical point, with a disputed liability shield for blockchain software developers at its center.

The provision, known as Section 604 of the Blockchain Regulatory Certainty Act, has strong support from the crypto industry for providing legal certainty, but faces opposition from law enforcement groups concerned it may weaken anti-trafficking safeguards.

Democratic Sen. Ron Wyden is urging Senate Majority Leader John Thune and Senate Democratic Leader Charles Schumer to preserve Section 604 in future versions of the broader Clarity Act.

The Blockchain Regulatory Certainty Act would create a safe harbor for non-custodial developers by clarifying they are not money transmitters, according to Wyden. He argues that smart policy can support law enforcement while also allowing innovation to continue.