- The Clarity Act’s current language includes a safe harbor provision to protect software developers from prosecution if their open-source code falls into the wrong hands without their explicit consent.
Senator Cynthia Lummis (R-WY) has revealed that the pending Clarity Act will carry a safe harbor provision for software developers. The move comes as a relief for creators of privacy-focused digital wallets and cryptocurrencies, which have been the subject of legal scrutiny over the years.
Protection for Software Developers
On Monday, Lummis thanked Senator Chuck Grassley (R-IA) for ensuring protections for software developers under the Clarity Act. If passed, the bill’s safe harbor provision would protect them from prosecution under 18 US Code § 1960, otherwise known as “Prohibition of Unlicensed Money Transmitting Businesses,” if bad actors used their open-source code or decentralized protocol for illegal activities without their knowledge or consent. Of course, it’s provided that the software is not really intended to be utilized for such purposes.
Additionally, Lummis highlighted that the current language of the legislation provides law enforcement authorities with the tools they need to curb illegal money-transmitting businesses. For her, the Clarity Act is “the most pro-law enforcement digital asset bill Congress has ever considered.” She urged her colleagues to push through with its markup on Thursday.
A Reprieve for Privacy Wallets and Cryptocurrencies
Lummis’ post received praise from supporters. However, several people also urged her to help free those who were either convicted or currently facing charges due to their involvement in the development of privacy-focused wallets and cryptocurrencies.
One example is the case of Samourai Wallet, which led to its co-founders’ conviction through guilty pleas in 2025. It led to approximately $238 million in asset forfeiture and four to five years of imprisonment, followed by probation after release.
Another is the ongoing litigation against Tornado Cash (TORN) founder Roman Storm. The court previously handed him a guilty verdict for running an unlicensed money transmittal business, while two others related to conspiracy to commit money laundering and sanctions evasion are pending.
The founders of Tornado Cash and the Samourai Wallet both argued that they had no control over how people would use their open-source code. Likewise, they questioned the prosecutors’ inability to prove their direct involvement or dealings with criminals or sanctioned parties. The matter raised significant concerns about the liability of developers in decentralized systems if criminal elements were to exploit their creations.
While the Samourai Wallet founders have already pleaded guilty to avoid lengthy and costly litigation, Tornado Cash’s developer has recently motioned for a retrial of his guilty verdict and dismissal of other pending cases.
The Clarity Act’s safe harbor provision for software developers should have prevented such issues in the past.
