Revised BRCA text drops criminal-liability protection for noncustodial developers

  • Coin Center identified changes to the revised BRCA text affecting developer protections.
  • Section 1960 protections were removed, while licensing-based prosecutions remain more difficult.
  • Roman Storm and Samourai Wallet developers face cases involving alleged transmission of criminal proceeds.

A revised BRCA text removes a provision that would have clearly protected developers who do not control users’ funds from criminal liability under Section 1960 of Title 18 of the U.S. Code. The proposal still protects those developers from being classified as money transmitters under the Bank Secrecy Act and FinCEN (U.S. financial-crime bureau) rules, making prosecutions based solely on failing to obtain a money-transmitter license or register with the federal government substantially harder. It does not prevent prosecutors from arguing that developers knowingly transmitted funds derived from criminal activity, a theory central to criminal cases involving Tornado Cash developer Roman Storm and Samourai Wallet developers. Coin Center described the compromise as substantive regulatory progress, while warning that developers remain exposed to broader money-transmission theories advanced by the U.S. Department of Justice. If the CLARITY Act passes with the revised BRCA language, the disputes would largely move to the courts.

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