In an attempt to distinguish between innovation and regulation, Coin Center has published a detailed report arguing that cryptocurrency software code deserves full First Amendment protection as “functional speech.”
Coin Centre speaks up to safeguard developers
The Washington, D.C. crypto policy group argues that simply writing and publishing open-source code is no different from penning a book or sharing a recipe. The report, published on Monday, calls developers “expressers and inventors,” not just custodians or middlemen.
With high-profile prosecutions of coders still fresh in the industry’s mind, Coin Center is urging courts and regulators to stop treating software creators as convenient targets for enforcement.
“Writing and publishing crypto software code is the same as writing a book or publishing a recipe,” the report states.
Coin Center Executive Director Peter Van Valkenburgh and Director of Research Lizandro Pieper go on to explain that developers who limit themselves to publishing and maintaining software should enjoy strict constitutional safeguards. It is as if they are practicing the existence of the free speech principles.
“They are speakers and inventors, not agents, custodians, or fiduciaries,” they wrote. “Extending pre-registration or licensing requirements to this speech activity drops the historical logic of financial oversight and imposes a classic prior restraint on activities that are primarily speech and expression, which is almost always unconstitutional.”
First Amendment protection of crypto software code
The paper draws a sharp distinction that the industry has long been asking regulators to recognize. Pure publication and maintenance of code, remains under protected speech. But the moment developers step into roles that involve directly controlling user assets, executing transactions on users’ behalf, or making discretionary decisions for them, they cross into territory that can legitimately fall under financial regulation.
Shedding light on the Lowe vs. SEC, where they argued for the rights to publish Investment Newsletters, without being registered as an investment adviser, they are arguing to distinguish between the bad agents and the writers of the code.
This framework, according to Van Valkenburgh and Pieper, is not about inventing new rules for crypto. It is about applying long-settled First Amendment principles to a new technological reality.
They point to the Supreme Court’s 1985 decision in Lowe v. SEC, which protected publishers who do not hold client assets or act on their behalf. The same logic, they say, should apply to crypto developers.
“Crypto software does not necessitate the invention of new legal doctrines or novel carveouts,” the report emphasizes. “It requires the faithful application of settled First Amendment principles to a new technological context.”
The paper also argued that “in the age of computers, where software is the primary means for expressing ideas and organizing economic life, those principles matter more, not less,” as at present one could view writing and publishing code as speech, “and in a free society, speech cannot be licensed into silence.”
Multiple cases of developers as scapegoats to criminal activities
The report lands at a moment when the crypto community is still digesting several high-stakes convictions. Last year, Tornado Cash developer Roman Storm was found guilty on charges including conspiracy to operate an unlicensed money-transmitting business.
The co-founders of the privacy-focused Bitcoin wallet Samourai Wallet received prison sentences of four to five years in a similar case.
In both cases, the defense held on to First Amendment arguments, pushing that the developers never intended to facilitate the said crimes and that their role was limited to simply providing tools.
In conclusion
Coin Center’s opinion stands with the notion that regulators should not declare developers to be financial intermediaries simply for the sake of administrative convenience. The growth of self-custody wallets and peer-to-peer protocols have already removed many traditional middlemen.
Treating coders as scapegoats for banks, risks chilling the very innovation that makes decentralized finance possible, according to the publications
