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Protect Developers or Weaken Oversight? Judiciary Committee Strongly Opposes Section 604 of the CLARITY Act

By: theblockbeats.news|2026/01/17 14:30:18
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BlockBeats News, January 17th, the chairman of the U.S. Senate Judiciary Committee stated in a letter to the Senate Banking Committee that the "Blockchain Regulatory Certainty Act" would weaken federal fund transfer regulation and should not be included in cryptocurrency market structure legislation.

The Judiciary Committee's Republican chairman, Chuck Grassley, and chief Democratic member, Dick Durbin, wrote in the letter that Section 604 of the Banking Committee's market structure bill - aimed at protecting software developers from criminal liability for third-party misuse of their products - would "weaken" federal law regarding unlicensed money transmission. "The Senate Judiciary Committee (which has jurisdiction over Title 18 of the U.S. Code) was not consulted, nor was it afforded the opportunity for advance substantive consideration of the proposed changes."

The letter cited the case of the Department of Justice's prosecution of Tornado Cash developer Roman Storm, stating that the case demonstrated that the prosecuting party had sufficiently argued the importance of existing regulations holding parties to unlicensed money transmission accountable. This letter is another blow to the market structure bill, with the Senate Banking Committee originally scheduled to debate and vote on the bill on Thursday but canceling the agenda on Wednesday night in the face of increasingly strong opposition.

If the provision is retained in the bill, the Judiciary Committee (responsible for legal matters) would need to sign off as the third committee on the overall package, and this latest controversy suggests that the legislative process may become even more complicated. DeFi advocates insist that without these specific protection provisions, they may withdraw their support, signaling another difficult deadlock.

The letter emphasized: "Therefore, we urge the committee to reject any proposed provisions that would weaken the government's ability to hold parties accountable for unlicensed money transmission, including Section 604."

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