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Republican Senator from Wyoming Cynthia Lummis has challenged the assertions made by cryptocurrency attorney Jake Chervinsky, who claimed that Lummis’s bill, the “Blockchain Regulatory Certainty Act,” would provide protection for developers of crypto services against legal actions.
Chervinsky contends that Section 3 of the proposed legislation, co-sponsored by Lummis and Democratic Senator from Oregon Ron Wyden, would require software developers who do not handle customer data and funds to comply with the Know Your Customer (KYC) process. Instead of focusing on safeguarding developers of decentralized finance (DeFi) services and crypto mixers, lawmakers have prioritized rewards for stablecoin holders in the CLARITY bill, according to the attorney.
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Chervinsky believes the primary objective is to ensure that software developers who do not manage user funds are not mistakenly classified as money transmitters. This issue remains unresolved, he insists. His concerns stem from several high-profile legal cases involving cryptocurrency developers. Last August, a court found Tornado Cash developer Roman Storm guilty of operating an unlicensed money transmission business.
In response, Lummis asserts that in recent weeks, legislators from both major American parties have been diligently working on amendments to Section 3 of the blockchain regulation bill. However, to provide developers with protection, the CLARITY bill must first be passed, the senator stated. Section 604 of CLARITY includes provisions from the Blockchain Regulatory Certainty Act, clarifying that the mentioned software providers should not be classified as financial institutions required to adhere to KYC procedures under the Bank Secrecy Act, Lummis assured.
Recently, the advocacy group Coin Center urged the U.S. Senate Banking Committee to protect crypto developers from lawsuits, as their activities are similar to those of internet service providers, cloud hosting companies, browser developers, and email service providers.
