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Ahmed Barakat
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Kristin Smith, CEO of the Solana Institute, is pushing the Senate to pass the CLARITY Act with its open-source developer protections fully intact, arguing that validators, non-custodial wallet providers, and software maintainers who do not control user funds should not be classified as financial intermediaries or money transmitters under federal law.
Smith made the case in a thread on X, saying the bill “has a real shot at passing the Senate”, but only if the protective language survives the floor process.
The CLARITY Act cleared the Senate Banking Committee 15–9 in May 2026, with two Democrats joining Republicans, and has since been placed on the Senate Legislative Calendar with a potential floor vote expected later this summer.
More than 60 crypto CEOs and founders signed an open letter backing the developer protections, including Solana co-founder Anatoly Yakovenko, Coinbase, a16z crypto, Uniswap, Kraken, Paradigm, and Ledger, an unusually broad coalition spanning exchanges, venture firms, and protocol builders.
Smith has described the coming weeks as make-or-break for securing a vote before the August recess.
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CLARITY Act: What Smith Is Actually Asking the Senate to Preserve
Smith’s core argument is a structural one. Open-source developers, validators, and non-custodial wallet providers do not take custody of user funds, do not execute transactions on behalf of users, and exercise no control over how their published code is used.
Treating them as brokers or custodians, or worse, money transmitters under 18 U.S.C. § 1960, would impose financial intermediary obligations on actors who are, in practice, publishing software and maintaining infrastructure.
That is the classification problem Smith wants the Senate to close.
The vehicle for doing so is the Blockchain Regulatory Certainty Act (BRCA), introduced in January 2026 by Senators Cynthia Lummis and Ron Wyden as a bipartisan proposal to codify FinCEN’s 2019 guidance distinguishing software developers from custodial money transmitters.
The BRCA is folded into the CLARITY Act as Section 604, alongside Section 601, which carves out developers from SEC registration requirements. Both provisions are now central bargaining points, not peripheral language.
The stakes of weakening this language are concrete. Without explicit protections, open-source library developers, validator operators, and teams behind non-custodial wallets like Phantom could face liability exposure solely for publishing code, the same legal theory that drove the prosecution of Tornado Cash developer Roman Storm and that has already pushed some builders offshore.
SEC Commissioner Hester Peirce has publicly argued that publishing open-source blockchain code is a protected First Amendment activity and should not automatically create intermediary status, framing that aligns directly with Smith’s Senate push.
The concern for crypto regulation broadly is that, absent clear statutory language, enforcement discretion fills the gap, and discretion is not a compliance standard.
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