CLARITY Act removes Section 604 or could subject non-custodial developers to Bank Secrecy Act constraints
2026-07-20 17:08
Odaily Odaily reports that one year after the U.S. House of Representatives passed the Digital Asset Market Clarity Act (CLARITY Act), the bill remains stalled in the Senate, facing opposition from the banking sector and partisan divisions. Supporters expect the Senate may vote before the August recess.
Industry organizations Coin Center and Blockchain Association have listed Section 604 as a key provision for protecting open-source innovation. This provision aims to prevent non-custodial blockchain developers, node operators, and validators from being classified as federal money transmitters.
Stefan Muehlbauer, Head of U.S. Government Affairs at CertiK, stated that deleting Section 604 could conflate software development with financial services, subjecting developers to the Bank Secrecy Act and triggering constitutional challenges related to the First Amendment. Iana Dimitrova, CEO of Openpayd, said that the growing use of stablecoins for cross-border value transfers has made the need for a federal regulatory framework more clear.
The bill also addresses accounting standards, acknowledging that the U.S. Securities and Exchange Commission's Staff Accounting Bulletin SAB 121 has been rescinded, and prohibits the SEC from reimposing equivalent crypto custody accounting requirements without a full notice and comment rulemaking process. Mark Zalan, CEO of Gomining, stated that Bitcoin still faces regulatory gaps such as tax treatment.
Industry organizations Coin Center and Blockchain Association have listed Section 604 as a key provision for protecting open-source innovation. This provision aims to prevent non-custodial blockchain developers, node operators, and validators from being classified as federal money transmitters.
Stefan Muehlbauer, Head of U.S. Government Affairs at CertiK, stated that deleting Section 604 could conflate software development with financial services, subjecting developers to the Bank Secrecy Act and triggering constitutional challenges related to the First Amendment. Iana Dimitrova, CEO of Openpayd, said that the growing use of stablecoins for cross-border value transfers has made the need for a federal regulatory framework more clear.
The bill also addresses accounting standards, acknowledging that the U.S. Securities and Exchange Commission's Staff Accounting Bulletin SAB 121 has been rescinded, and prohibits the SEC from reimposing equivalent crypto custody accounting requirements without a full notice and comment rulemaking process. Mark Zalan, CEO of Gomining, stated that Bitcoin still faces regulatory gaps such as tax treatment.
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