Clarity Act is Clear: Writing Code is not Money Transmission

Senator Cynthia Lummis is pressing her case for the Digital Asset Market Clarity Act, arguing that the legislation draws a clear legal line that writing code does not constitute money transmission. The Wyoming Republican, who chairs the Senate Banking Subcommittee on Digital Assets, has made developer protection a central pillar of her push to move the bill to a full Senate vote.

What the Bill Does for Developers

At the core of Lummis's argument is Section 604 of the CLARITY Act, drawn from the Blockchain Regulatory Certainty Act. The provision codifies a principle from FinCEN's 2019 guidance: that developers and infrastructure providers who do not custody or control user funds are not money transmitters subject to Bank Secrecy Act registration or criminal prosecution. In practical terms, Section 604 of the bill would clarify that developers who do not control user funds are not money transmitters under federal law.

The push for this protection was sharpened by the August 2025 case of Roman Storm. Senator Lummis has pointed explicitly to the Roman Storm case as the bill's animating example. Storm, a co-founder of Tornado Cash, an open-source privacy protocol built on Ethereum, was convicted of conspiracy to operate an unlicensed money transmitting business. More than 60 CEOs and founders, including executives from Coinbase, Uniswap, Kraken, a16z crypto, and Paradigm, signed a letter to Senate leadership in June calling Section 604 a non-negotiable condition of their support for the broader bill.

Lummis has also been careful to balance the developer protections with reassurances to law enforcement. Lummis said the bill "allows law enforcement to prosecute bad actors who publish code with the specific intent, and that's the key, with the specific intent that their code be used to facilitate money laundering."

Where the Bill Stands

Beyond developer protections, the CLARITY Act addresses a long-standing structural problem in U.S. crypto oversight. The CLARITY Act would grant the CFTC "exclusive jurisdiction" over "digital commodity" spot markets, while maintaining SEC jurisdiction over investment contract assets. That division of authority is designed to end years of regulatory overlap that has left many crypto firms uncertain about which agency they answer to.

The Digital Asset Market Clarity Act has cleared two major legislative hurdles, passing the House in July 2025 with a 294-134 bipartisan vote before the Senate Banking Committee advanced it 15-9 in May 2026. The bill now sits on the Senate Legislative Calendar awaiting a floor vote. Assuming Senate passage, the legislation will then need to be reconciled with the House-passed version of the CLARITY Act. That process will produce the final text sent to the President's desk.

The Administration has publicly expressed a desire to have crypto market structure legislation enacted by the Fourth of July, but hurdles remain. Failure to clear the Senate in the current session would likely push any final resolution well into the future, delaying the legal certainty the industry has been seeking for years.

Sources:
BeInCrypto: Lummis Says CLARITY Act Will End Crypto Developer Prosecution for Writing Code
Congress.gov: H.R.3633 Digital Asset Market Clarity Act
Crypto Council for Innovation: Senate Banking Advances Clarity