coindesk.com
The Blockchain Regulatory Certainty Act would weaken federal money transmitter rules and should not be included in crypto market structure legislation, the U.S. senators running the body's Judiciary Committee said in a letter to the Senate Banking Committee.
Section 604 of the Banking Committee's market structure bill, which aims to protect software developers from criminal liability if third parties misuse their products, would "weaken" federal laws around unlicensed money transmitter businesses, wrote Senators Chuck Grassley and Dick Durbin, respectively the Republican chairman and ranking Democrat on the Judiciary Committee.
"The Senate Judiciary Committee — which has jurisdiction over Title 18 — was not consulted or given the opportunity to meaningfully review the proposed changes in advance," the letter, which was first reported by Politico, said.
The letter, dated January 14, pointed to the Department of Justice's case against Tornado Cash developer Roman Storm, saying it demonstrated that the prosecution proved the importance of the existing statute against parties tied to unlicensed money transmitting businesses.
The letter is another hit for the market structure bill, which the Senate Banking Committee was set to debate and vote on Thursday before canceling in the face of mounting opposition on Wednesday night.
Sources familiar with the situation told CoinDesk that the BCRA had been a contentious part of the ongoing negotiations on the overall market structure bill and that some Democrats had resisted including it in the latest draft.
Senators Cynthia Lummis and Ron Wyden had already introduced the Blockchain Regulatory Certainty Act as its own standalone bill on Monday, which at the time implied it might not be included in the overall bill.
If the provision remains in the bill, this latest argument would suggest that the judiciary panel, which handles legal issues, would have to be a third committee to sign off on the overall package.
DeFi advocates have maintained that leaving these particular protections out could cost their support, suggesting another difficult impasse.
"Accordingly, we urge the Committee to reject any proposed language, including Section 604, which would weaken the government’s ability to hold culpable actors accountable for operating unlicensed money transmitting businesses," the letter said.