Reported by Anas Hassan

(Excerpt shared below. To read full report, go to: https://cryptonews.com/news/bipartisan-push-to-remove-developer-safeguards-from-market-structure-bill/)

Senate Judiciary leaders Chuck Grassley and senators have warned that a provision in Senate Banking Chair Tim Scott’s crypto bill could curtail law enforcement’s ability to prosecute money laundering and other illicit financial crimes.

The provision would exempt certain blockchain software developers from financial licensing requirements.

According to Politico, Grassley and Durbin wrote in a private letter to Scott and ranking member Elizabeth Warren that Section 604 of the crypto market structure legislation “falls squarely within the Judiciary Committee’s jurisdiction,” adding that their panel “was not consulted” about the language ahead of a since-postponed markup.

The section mirrors the Blockchain Regulatory Certainty Act, bipartisan legislation led by Senator Cynthia Lummis and Senator Ron Wyden.

Law Enforcement Warns of Prosecution Gaps

The disputed provision exempts “a dangerously broad category of actors” from criminal law treatment, according to the Grassley-Durbin letter.

They warned it would have “likely precluded the government from bringing charges against” the founder of Tornado Cash, a crypto mixer platform prosecutors said was used to launder money.

A co-founder of the platform was found guilty of operating an unlicensed money transmitting business last year, though crypto proponents and congressional Republicans have decried the conviction.

“Such a gap risks attracting illicit actors—like cartels and other sophisticated criminal organizations—to decentralized platforms,” the letter stated.