Solana Institute: CLARITY Act shields OSS devs from intermediary rules

Solana Institute CEO Kristin Smith is urging the US Senate to advance the CLARITY crypto market structure bill while preserving protections for developers. The core argument is that open-source software developers and blockchain infrastructure providers should not be regulated as financial intermediaries merely for publishing or maintaining software that others use. According to Cointelegraph, Smith emphasized that maintaining these protections is critical as the legislation gains momentum in the upper chamber.

In a thread on X, Smith noted that the bill “has a real shot at passing the Senate,” underscoring the importance of lawmakers safeguarding robust protections for software developers. The push reflects a broader policy debate about how to regulate the ecosystem without stifling innovation or imposing onerous requirements on non-custodial actors within decentralized networks.

Smith highlighted that more than 60 crypto executives and founders have signed an open letter urging the Senate to keep strong developer protections in the CLARITY Act. Among the signatories is Anatoly Yakovenko, co-founder of Solana, underscoring industry-wide concern that open-source developers, validators and non-custodial wallet providers do not control user funds or execute transactions and therefore should not be treated as brokers or custodians.

She pointed to the Blockchain Regulatory Certainty Act (BRCA) as a framework that would provide legal clarity for noncontrolling software developers and blockchain infrastructure providers that do not custody customer assets or control transactions. BRCA was introduced in January by Senators Cynthia Lummis and Ron Wyden, with the aim of preventing open-source developers from being classified as “money transmitters” solely for publishing software code.

The CLARITY Act has already moved through the legislative process, clearing the Senate Banking Committee in May and being placed on the Senate Legislative Calendar. This positioning sets the stage for a potential floor vote later this summer, heightening the relevance of developer protections in ongoing regulatory debates.

Key takeaways

• The BRCA seeks to shield noncontrolling software developers and blockchain infrastructure providers from money transmitter requirements solely for publishing or operating code that does not custody assets or control transactions.
• The CLARITY Act has advanced in the Senate Banking Committee and is on the Senate Legislative Calendar, signaling possible floor consideration in the near term.
• Industry signatories, including Anatoly Yakovenko, have urged lawmakers to preserve robust protections for developers as part of any final package.
• SEC Commissioner Hester Peirce has framed open-source blockchain code as protected speech and argued that developers should not be treated as financial intermediaries simply because their software is used by others.
• Together, these developments reflect a broader effort to craft regulatory certainty that supports innovation while addressing compliance, licensing and enforcement considerations for U.S. crypto firms, banks and institutions.

Policy trajectory: CLARITY and BRCA in focus

The central policy question is how to maintain a favorable environment for innovation in the United States without extending gatekeeping or supervisory burdens to core software contributors. BRCA, introduced by Senators Lummis and Wyden, explicitly targets the risk of misclassifying noncontrolling developers and infrastructure providers as money transmitters simply for publishing code or maintaining open networks. By providing a statutory safe harbor of sorts, BRCA aims to reduce regulatory uncertainty and enable continued development of open-source tooling that underpins many blockchain ecosystems. The proposed measure aligns with a push across parts of the industry to delineate between custodial actors and software publishers, a distinction viewed by supporters as essential to healthy ecosystem growth.

On the market-structure front, the CLARITY Act is designed to clarify how the sector should be regulated, with particular emphasis on safeguarding innovation while ensuring consumer and investor protections. Its advancement through the Senate Banking Committee and placement on the Legislative Calendar illustrate a notable convergence of industry lobbying with legislative processes. If enacted, the bill could influence licensing regimes, supervisory expectations, and compliance programs for a wide range of market participants, including exchanges, wallet providers, and non-custodial infrastructure services.

These dynamics occur within a broader U.S. regulatory landscape that seeks to balance enforcement with clarity. The BRCA and CLARITY proposals mirror ongoing debates about how to classify digital assets, how to treat open-source tooling, and how to regulate cross-border activities. The policy package also intersects with discussions on registration requirements, cross-border cooperation, and the steps necessary for U.S. firms to function competitively alongside international counterparts. The evolving framework is being watched closely by legal teams, compliance officers, and risk managers across financial institutions and crypto intermediaries alike.

Regulatory interpretations and industry impact

Regulatory interpretations surrounding open-source software and decentralization have gained renewed attention thanks to public comments from senior regulators. At a recent public forum, SEC Commissioner Hester Peirce argued that publishing open-source blockchain code constitutes protected speech under the First Amendment, and that developers should not be treated as financial intermediaries solely because others use their software. Peirce’s remarks, delivered at the IC3 Blockchain Camp at Princeton University, emphasized the legal protection for open-source contributions and reinforced calls for clearer rules that distinguish software publishing from asset custody or transaction control.

The industry’s response to these interpretations centers on compliance practicality and risk management. If reforms succeed in preserving developer protections, firms building or operating non-custodial services — including validators, auditors, and wallet providers — could face a clearer threshold for regulatory classification. That clarity would support targeted licensing strategies, more predictable AML/KYC expectations, and more defined regulatory responsibilities for actors that are not custodians of user funds. In this context, policy certainty can reduce legal risk for developers and infrastructure providers while maintaining guardrails for consumer protection and financial stability.

From a regulatory enforcement perspective, the shift toward explicit protections for code publishers and infrastructure entities could influence how agencies calibrate their oversight posture. While enforcement will continue where appropriate, a framework that distinguishes software publication from asset custody may reduce ambiguous interpretations that currently create compliance friction for open-source projects. For market participants, the practical takeaway is an emphasis on robust governance, transparent software practices, and clearly documented asset custody arrangements when applicable. In the longer term, this alignment between developer protections and regulatory expectations could shape licensing strategies, custody models, and cross-border collaboration with other jurisdictions that pursue different regulatory approaches.

Broader policy landscape and cross-border considerations

The CLARITY and BRCA discussions occur within a wider global context of crypto regulation. Regulators in different jurisdictions have pursued varied approaches to market structure, asset classification, and tech-provider exemptions. The United States’ emphasis on maintaining a competitive, innovation-friendly environment while enforcing consumer protections sits alongside comparable EU developments, such as MiCA, which delineate responsibilities for market participants within a different regulatory regime. For market participants, this juxtaposition reinforces the importance of aligning internal governance, KYC/AML controls, licensing readiness, and cross-border compliance programs with evolving statutory expectations in multiple jurisdictions.

Analysts and compliance teams should monitor the legislative calendar for the CLARITY Act, BRCA, and related rulemaking activity. The outcome could influence how U.S.-based exchanges, wallet providers and infrastructure teams structure their operations, engage with regulators, and coordinate with international partners. As the legislative process unfolds, the industry’s ability to demonstrate robust developer governance and clear asset-handling practices will be central to achieving a stable regulatory environment that supports legitimate innovation while protecting investors and consumers.

Closing perspective: The convergence of developer protections with market-structure reform signals a pivotal moment for policy specificity in crypto regulation. Watch for floor votes, potential amendments, and how regulators translate these proposals into enforceable rules that affect licensing, custody, and the treatment of open-source code in practice.

This article was originally published as Solana Institute: CLARITY Act shields OSS devs from intermediary rules on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.