On February 28, U.S. lawmakers from both parties jointly introduced the “Promoting Innovation in Blockchain Development Act” on February 26, aiming to clarify the legal responsibilities of blockchain developers and prevent open-source code authors from being mistakenly classified as remittance institutions. The proposal, led by Scott Fitzgerald, Ben Cline, and Zoe Lofgren, focuses on amending Section 1960 of the U.S. Code to target custodians who control customer assets or execute transfers on behalf of users.
The bill suggests that, amid rising debates over whether “open-source software developers should bear remittance licensing responsibilities” and “legal risks for non-custodial blockchain developers,” clear exemptions should be provided for entities that only write or distribute code. The ongoing lawsuits related to Tornado Cash have further amplified industry concerns about “code as crime.” Ben Cline noted that long-term regulatory expansion blurs the line between malicious actors and technological innovators; Scott Fitzgerald also emphasized that innovators should not face undue law enforcement pressure for developing infrastructure.
Industry support has come from the Solana Institute and the Blockchain Association, which believe the bill will help establish a clear framework distinguishing “open-source developers from custodial financial intermediaries.” Meanwhile, discussions in Washington also include topics like the CLARITY Act and the GENIUS Act. The former, passed by the House in 2025 but with slowed progress, aims to clarify regulations, while the latter enhances stablecoin oversight without expanding developer responsibilities.
Analysts believe that if enacted, the “Promoting Innovation in Blockchain Development Act” will set a precedent for reshaping the U.S. crypto regulatory framework and defining blockchain developers’ compliance boundaries. Ongoing lobbying efforts continue, and the specific wording and scope of the Section 1960 amendments could be a key factor influencing U.S. crypto policy in 2026.
Disclaimer: The information on this page may come from third parties and does not represent the views or opinions of Gate. The content displayed on this page is for reference only and does not constitute any financial, investment, or legal advice. Gate does not guarantee the accuracy or completeness of the information and shall not be liable for any losses arising from the use of this information. Virtual asset investments carry high risks and are subject to significant price volatility. You may lose all of your invested principal. Please fully understand the relevant risks and make prudent decisions based on your own financial situation and risk tolerance. For details, please refer to
Disclaimer.
Related Articles
Hong Kong Legislative Council Chairman Calls for Cautious Development of Stablecoins and Virtual Assets, Emphasizing the Need to Regulate AI Oversight
Hong Kong Legislative Council Chairman Regina Ip stated that she will support the development of the first five-year plan and proposed recommendations for financial and technological development. Hong Kong's National People's Congress delegate Chan Zhenying emphasized the need for cautious development of emerging financial products and regulation of AI usage to ensure financial security. Wu Jiezhuang mentioned that Hong Kong should leverage its advantages, consolidate its status as an international financial center, and promote technological innovation.
GateNews2h ago
A certain CEX criticizes the new U.S. digital asset tax reporting regulations as too complicated, potentially increasing the burden on retail investors.
A Vice President of Tax at a certain CEX pointed out that the IRS's new regulation 1099-DA is overly complicated, requiring the reporting of small transactions such as stablecoin trades and Gas fees, which may lead to over-reporting and increase administrative burdens for cryptocurrency holders.
GateNews2h ago
South Korea is preparing to open up for crypto investment businesses
The South Korean financial regulator is finalizing new guidelines allowing listed companies to invest directly in cryptocurrencies, aiming to clarify the legal framework for digital asset participation amid increased oversight. Major cryptocurrencies may benefit, but stablecoins face risks. This policy could attract institutional investment and enhance market transparency.
TapChiBitcoin3h ago
The U.S. Department of the Treasury recommends establishing a safe harbor mechanism for digital asset freezing, allowing for the temporary freezing of suspicious funds.
Gate News: On March 8, the U.S. Department of the Treasury submitted a report to Congress under the GENIUS Act, recommending that DeFi be explicitly required to undertake anti-money laundering and counter-terrorism financing (AML/CFT) obligations, and considering the establishment of a "hold law" mechanism for digital assets, allowing institutions to temporarily freeze assets during investigations of suspicious transactions without a court order. The report also revealed that the scale of crypto crimes continues to grow, with FBI records showing $9 billion in crypto scam losses in 2024.
GateNews3h ago
U.S. CLARITY Act Sparks Controversy: White House Crypto Official and Banking Industry Clash Over Stablecoin Incentives
On March 8th, the discussion of the U.S. CLARITY Act sparked debates between the banking industry and White House officials. The president of the Texas Independent Bankers Association stated that a compromise would impact the local economy, while White House advisors warned that no compromise could lead to disastrous consequences.
GateNews4h ago
Florida Gov. Ron DeSantis Eyes State Stablecoin Framework Following Senate Passage
Florida's Senate unanimously passed Senate Bill 314, regulating stablecoins under its anti-money laundering laws and defining them as “monetary value.” Governor DeSantis is expected to sign the bill, aligning state oversight with federal guidelines.
Decrypt6h ago
