Wyden Sides with Crypto Industry Over Controversial Clarity Act Provision

US Senator Ron Wyden has written to Senate leaders John Thune and Charles Schumer, urging them to keep Section 604 of the Clarity Act intact. The section, known as the Blockchain Regulatory Certainty Act (BRCA), creates a safe harbor for developers who don't hold or control customer funds. It ensures they are not counted as money transmitters.

Wyden's letter comes amidst growing pressure from law enforcement groups. In June, two coalitions sent letters to Acting Attorney General Todd Blanche and White House crypto adviser Patrick Witt, raising concerns about the developer safe harbor. The groups warned that broad exemptions could shield people who help move illicit money.

The crypto industry largely supports Section 604, with many arguing it gives software developers legal clarity and keeps innovation from moving overseas. Wyden's rationale is that the provision would align policy between the Department of Justice and the Financial Crimes Enforcement Network. He believes it would focus resources on people running unlicensed money transmitting businesses.

With time running out, lawmakers are stuck on whether to include BRCA in future drafts of the Clarity Act. The November elections are approaching, and Congress leaves Washington in August.