U.S House Introduces Bipartisan Crypto Bill To Protect Crypto Developers Amid DeFi Push Under CLARITY Act

Crypto bill discussions intensified on February 26, 2026, as Representatives Scott Fitzgerald, Ben Cline, and Zoe Lofgren introduced the Promoting Innovation in Blockchain Development Act of 2026. The bipartisan measure aims to protect software developers who write code but do not control customer funds from prosecution under criminal code Section 1960.

Crypto Bill Clarifies Section 1960 Scope

According to a DeFi Education Fund (DEF) blog post, the lawmakers claimed that this crypto bill clarifies that only those who control assets and transmit funds on behalf of users are subject to Section 1960. This aligns with the long-standing interpretation of the Treasury Department’s money transmission regulations.

The Crypto bill has been proposed as a solution that brings legal clarity for blockchain developers. This is due to the decentralized and open-source systems that do not easily align with intermediary rules. This follows calls for better protection for crypto software developers among industry leaders. 

Journalist Eleanor Terrett wrote that this bill clearly distinguishes between those who control funds and those who write code. This distinction has been an essential part of decentralized finance advocacy and would provide a major boost for the DeFi industry.

It is worth noting that the Section 1960 legislation focuses on custodial money transmitters. There have been recent actions involving Tornado Cash and Samourai Wallet, in which developers faced prosecution. This has caused a great deal of debate between crypto developers and regulators regarding this legislation.

Meanwhile, as CoinGape reported, Democrats have convened a meeting to advance a Senate crypto bill. a16z, a venture capital firm, met with Senate Republicans regarding crypto and artificial intelligence legislation. Marc Andreessen and Chris Dixon urged lawmakers to advance the CLARITY Act. The White House urged a March 1 deadline for a Senate vote on market structure legislation.

Industry Leaders Press Lawmakers on DeFi and Tax Rules

In a recent X post, the Blockchain Association revealed that its members are going to Capitol Hill to discuss DeFi in the draft of the Senate Banking Committee. The discussions will center on Title III and the status of BRCA provisions. There are 21 leaders from 18 companies meeting with 24 Senate offices on the Banking and Agriculture Committees.

In the statements from the Blockchain Association, open-source developers are not considered financial intermediaries, provided they don’t custody or control customer assets. The Blockchain Association also claimed that policy decisions made during the negotiation of the CLARITY Act will determine the outcome for innovation. 

CoinGape reported that the Blockchain Association released its framework for crypto tax rules earlier this week. The framework includes principles that are based on the following: administrability, economic ownership, and functional consistency in mining and staking. 

Some recommendations include a de minimis exemption for small transactions. The framework also proposes treating stablecoins as cash for tax purposes.