2026 Bill Shields Blockchain Developers from Prosecution Risks

- New bill to reduce legal risks for blockchain developers. - Bipartisan push to maintain U.S. leadership in blockchain innovation. On February 26, 2026, U.S. lawmakers introduced the *Promoting Innovation in Blockchain Development Act of 2026*. The bill targets legal uncertainties for blockchain developers who do not control user funds. Representatives Zoe Lofgren (D-CA), Ben Cline (R-VA), and Scott Fitzgerald (R-WI) lead the bipartisan effort, which proposes amendments to Section 1960 of the Federal Criminal Code. By distinguishing software developers from money transmitters, the legislation shields programmers from criminal liability if they lack direct involvement in managing or transmitting user assets. A day later, on February 27, CoinDesk reported that the initiative provides much-needed clarity for developers who maintain blockchain code without offering financial services. The bill addresses a critical gap by introducing the term "non-controlling developers." It defines these individuals as those who create or maintain software but do not hold, transfer, or operate user funds. Advocates argue this legal separation is crucial, as regulatory ambiguity risks driving top talent and innovation out of the U.S. The bill’s introduction follows controversial legal actions involving blockchain privacy tools like Tornado Cash and Samourai Wallet. These cases prompted widespread concern over whether developers could be held accountable for tools they designed, even when they had no role in handling user assets. The proposed legislation directly responds to these fears, affirming that open-source coding efforts alone should not classify developers as money-transmitting businesses. In parallel, a Senate companion bill shares a similar goal. Titled the *Blockchain Regulatory Certainty Act*, Senators Cynthia Lummis (R-WY) and Ron Wyden (D-OR) introduced it in January. This legislation also seeks to ensure developers are not penalized as money transmitters under federal law if they lack access to user assets. Together, these efforts underscore Congress’s broader aim to refine digital asset regulations and solidify the U.S.’s position as a global leader in the blockchain space. The *Promoting Innovation in Blockchain Development Act* has received strong backing from key advocacy organizations, including the Blockchain Association and the DeFi Education Fund. Supporters stress that protecting developers is essential to preserving the future of open-source technology and decentralized finance in the country. However, the bill’s effect on ongoing legal proceedings against developers remains uncertain, which highlights the challenges of creating regulatory consistency in the fast-evolving blockchain sector. This legislative effort is part of a larger movement in Congress to address digital asset governance. Beyond this developer-focused bill, lawmakers are also advancing comprehensive measures, such as the *CLARITY Act*, to shape the broader regulatory framework for digital assets. Still, the *Promoting Innovation in Blockchain Development Act of 2026* stands out for its targeted focus. It aims to balance innovation and accountability while fostering a more predictable environment for blockchain developers in the U.S.