‘Outlaw code, lose innovation’ – White House defends DeFi developers’ protections in CLARITY Act

The White House has backed the crypto industry’s demand for DeFi software developer protections.  On Friday, Trump’s crypto advisor, Patrick Witt, said the developer protections were “one of the most important aspects” of the CLARITY Act, the broader crypto bill being reviewed by the Senate.  He cautioned that outlawing code would serve nothing but drive the financial innovation to go offshore.  The proposed developer protections, captured in a separate bill, the Blockchain Regulatory Certainty Act (BRCA), aim to prevent non-controlling developers from being categorized as money transmitters.  The proposal was introduced in January 2026 by Senator Cynthia Lummis. The BRCA bill will be included in the CLARITY Act before the expected Senate markup in the second half of April.  However, there has been speculation that the said protections could be axed as part of a compromise to advance the CLARITY Act. But Lummis denied these rumors. Witt’s latest statement further reinforces that these protections are still intact.  Will the White House help advance the CLARITY Act by May? The crypto industry overwhelmingly hailed the White House's support for developer protections. For her part, Kristin Smith, president of the Solana Policy Institute, called the protections ‘foundational.’  Likewise, Peter Van Valkenburgh, the executive director of crypto lobby group Coin Center, added,  If you outlaw code, you victimize innocent developers, discourage legitimate users, and leave the most powerful tools to criminals. No market structure bill without BRCA. Even so, a section of the crypto community felt that if the Administration was not serious about developer protections. If so, it would have pardoned Roman Storm, founder of Tornado Cash, a privacy-focused crypto mixer.  That said, the stablecoin yield stalemate could cause the CLARITY Act to miss being passed into law this year, according to investment bank TD Cowen.  Despite the mounting pressure to pass the bill, TD Cowen said the CLARITY Act could be revisited in 2027, citing the November midterm elections. The key deadlines to watch will be late April for possible Senate Banking Committee markup and late May for the final Senate floor vote.  If there is no progress by May, then the bill will likely be pushed to 2027, as projected by TD Cowen, subject to whoever will control Congress after the midterms.  Final Summary Trump’s crypto advisor, Patrick Witt, has defended the developer protections, calling them an ‘important’ part of the CLARITY Act to make the U.S. the crypto capital of the world.  However, uncertainty still prevails over whether the crypto bill could be advanced by May.