U.S. Lawmakers Propose Blockchain Innovation Act to Protect Developers

U.S. Representatives Scott Fitzgerald, Ben Cline, and Zoe Lofgren have introduced the Blockchain Innovation Act of 2026, aiming to shield software developers from criminal liability under Section 1960 of the U.S. Code. According to Odaily, the proposed legislation clarifies that Section 1960 applies only to entities controlling customer funds, not to developers merely writing code. This distinction has been a focal point for the cryptocurrency industry, particularly in the decentralized finance (DeFi) sector, which has advocated for its inclusion in the Clarity Act. Originally targeting custodial money transfer institutions, Section 1960 has been controversially applied in recent cases, such as those involving Tornado Cash and Samourai Wallet, to non-custodial software developers who do not manage user funds. This has led to tensions between crypto developers and regulatory bodies.