- The CLARITY Act’s BRCA framework is an issue for prosecutors, not the police.
- Proposal to the White House does not reflect the National Sheriffs Association’s input.
- BRCA is a legislative framework that shields non-custodial blockchain software developers.
Amid ongoing delays in the passage of the CLARITY Act, renowned American journalist Eleanor Terrett believes the BRCA framework embedded in the legislation is a prosecutor’s concern rather than the police’s. Terrett made the statement while responding to issues surrounding groups proposing changes to the CLARITY Act before its potential passage.
Who is Pushing Back on BRCA Framework?
According to Terrett, the White House and Treasury are pushing back on Senator Catherine Cortez Masto’s claim that the proposal reflects the National Sheriffs Association’s input. Even though the association had publicly opposed the CLARITY Act in the past, Terrett noted that the group did not sign on to the proposed changes that would remove language shielding software developers from criminal prosecution.
The journalist highlighted Crypto Council Executive Director Patrick Witt’s comments about the proposal, saying it is “not even close” to the administration’s position to remove that part of the bill. She further noted that the US Treasury Department has described the language as a product of Washington lobbyists.
What Exactly is BRCA Framework
The said proposal affects a section of the CLARITY Act that serves several functions, including shielding non-custodial blockchain software developers, open-source wallet creators, and protocol builders from being classified as “money transmitters”. It also dictates that developers cannot be treated as financial institutions under the Bank Secrecy Act (BSA) unless they actually hold, control, or maintain custody of consumer funds.
Additionally, because open-source and decentralized developers do not have direct customers or custody of assets, the BRCA states that they cannot physically collect KYC data. Therefore, the framework ensures they face no penalties or criminal liability for failing to report data they do not have access to. Meanwhile, it is worth noting that the BRCA codifies existing FinCEN guidance into federal law and retains criminal penalties if a developer purposefully builds software to direct or hide criminal proceeds.
What is Delaying the CLARITY Act?
Notably, the CLARITY Act is currently stalled due to partisan gridlock over presidential ethics rules, intense lobbying warfare between Wall Street banks and crypto firms, and tight legislative scheduling ahead of the August 7, 2026, congressional recess. Most crypto community members believe passing the bill into law will provide clarity and define how the ecosystem will run.
Related: BRCA & CLARITY Acts: Why These Top 8 Crypto Groups Want The Two Bills Merged
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