US lawmakers Scott Fitzgerald, Ben Cline, and Zoe Lofgren have introduced the Blockchain Innovation Act for 2026, aiming to shield software developers from criminal liability under Section 1960 of the US Code. The proposed legislation clarifies that Section 1960 applies only to entities controlling users’ funds, not to developers who merely write code. This law is particularly significant for the cryptocurrency and decentralized finance (DeFi) sectors, where developers have advocated for such clarity. Originally, Section 1960 targeted custodial money transmission businesses, but recent cases involving Tornado Cash and Samurai Wallet have extended its application to non-custodial software developers who do not manage user funds, causing tension between crypto developers and regulators. The advancement of blockchain technology has transformed the financial system, introducing regulatory complexities. This act seeks to provide legal protection to developers, encouraging innovation without fear of prosecution. Its implementation is expected to boost investment and creativity in the crypto industry, although maintaining a balanced regulatory framework remains a challenge.
Source: binance
