A leading cryptocurrency advocacy group is making a bold constitutional argument to shield software developers from prosecution. In a detailed report published this week, Coin Center contends that writing and publishing code is a form of “functional” free speech protected by the First Amendment. This legal stance arrives as developers face increasing scrutiny and criminal liability for how their decentralized software is used by others.
The Core Argument: Code as Protected Speech
Coin Center’s report, authored by Executive Director Peter Van Valkenburgh and Director of Research Lizandro Pieper, draws a direct parallel between software and other protected forms of expression. According to the authors, publishing crypto software is fundamentally similar to writing a book or sharing a recipe. The First Amendment, they argue, offers “strict constitutional protection” for developers who merely create and maintain software without controlling user assets or acting on their behalf.
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“They are speakers and inventors, not agents, custodians, or fiduciaries,” Van Valkenburgh and Pieper wrote. The report warns that imposing licensing or pre-registration requirements on this activity constitutes a “classic prior restraint” on speech, which courts have historically viewed as unconstitutional.
This argument seeks to address a growing fear among developers. High-profile convictions in 2024 and 2025, including those related to the Tornado Cash mixing service and the Samourai Wallet, have created a chilling effect. Developers now question whether they could be held criminally responsible for the actions of third parties who use their open-source tools.
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Drawing a Legal Line: Speech vs. Regulatable Conduct
The central challenge for regulators and courts is distinguishing between protected publication and professional financial services. Coin Center’s framework proposes a clear boundary. A developer engages in regulatable conduct, the report states, when they directly control user assets, execute transactions for users, or make decisions on a user’s behalf. In these scenarios, traditional financial oversight laws logically apply.
However, the act of writing and releasing code itself should be treated as pure speech. The authors point to confusion in some lower courts, which have suggested that because software produces real-world effects, it resembles conduct more than speech. “We argue that such activities are pure speech and that the Supreme Court’s existing jurisprudence insists on this interpretation,” the report asserts.
A Legal Precedent from 1985
To support their position, Van Valkenburgh and Pieper cite the Supreme Court case Lowe v. SEC (1985). In that decision, the Court found that a publisher who does not hold client assets or take action for them is protected by free speech and is not practicing a regulated profession. Coin Center argues this precedent should extend directly to software developers who publish code without operating the resulting network or controlling user funds.
This is not merely an academic debate. Roman Storm, a developer convicted in 2024 for his role with Tornado Cash, is reportedly preparing a motion to dismiss based on similar First Amendment grounds. His legal team may reference other cases, like Cox Communications Inc. v. Sony Music Entertainment, to argue a lack of intent to allow crime.
The Regulatory Dilemma and the ‘Middleman’ Problem
Crypto software often eliminates traditional financial intermediaries. Peer-to-peer transactions and self-custody wallets operate without a central authority to send or hold funds. Regulators have historically focused on these intermediaries—banks, brokers, and money transmitters—requiring them to obtain licenses and comply with anti-money laundering rules.
The report acknowledges the difficulty of building regulatory frameworks for new technology. But it strongly cautions against a shortcut: declaring software developers to be de facto middlemen for “administrative convenience.”
“Crypto software does not necessitate the invention of new legal doctrines or novel carveouts,” the authors write. “It requires the faithful application of settled First Amendment principles to a new technological context.”
Industry watchers note that this tension is at the heart of current U.S. crypto policy debates. The implication is that treating code as speech could limit regulators’ reach, potentially leaving gaps in enforcement unless new, tailored laws are passed by Congress.
What This Means for Developers and the Industry
The legal uncertainty has tangible effects. Talented developers may avoid the crypto space or move their projects offshore due to fear of prosecution. Innovation could stagnate in the United States. Data from developer activity platforms shows a noticeable shift in project creation to jurisdictions with clearer, or more lenient, regulatory stances since the major convictions of 2024.
For investors, the outcome of this legal theory matters. A strong First Amendment protection for code could develop a more sturdy and innovative domestic development environment. Conversely, if courts reject this argument, the U.S. crypto industry may face stricter controls and a potential exodus of talent.
Coin Center’s report is part of a broader lobbying effort. The group has also urged the Senate to preserve protections for developers in pending legislation. Their goal is to embed the principle that “writing and publishing code is speech” into law before more prosecutions set contrary precedents.
“In the age of computers, where software is the primary means for expressing ideas and organizing economic life, those principles matter more, not less,” the report concludes. “And in a free society, speech cannot be licensed into silence.”
Conclusion
Coin Center’s argument that software code is “functional” free speech under the First Amendment presents a fundamental challenge to how the U.S. regulates cryptocurrency. By framing code publication as protected expression akin to writing, the group aims to carve out a legal safe harbor for developers. This debate will likely play out in courtrooms and congressional hearings throughout 2026, with significant implications for the future of crypto innovation and financial regulation in America. The core question remains: where does protected speech end and regulatable financial conduct begin?
FAQs
Q1: What is Coin Center’s main argument about crypto code?
Coin Center argues that writing and publishing software code is a form of “functional” free speech protected by the First Amendment, similar to publishing a book or recipe. They believe developers should not need licenses or face prior restraint for merely publishing open-source software.
Q2: Why are crypto developers worried about legal liability now?
Several high-profile convictions in 2024 and 2025, including those of Tornado Cash and Samourai Wallet developers, have set precedents where creators were held liable for how third parties used their software tools. This has created widespread concern about criminal prosecution.
Q3: When does Coin Center say a developer’s activity becomes regulatable?
The report states regulation should apply when a developer crosses from publishing code into professional conduct: specifically, when they control user assets, execute transactions for users, or make decisions on a user’s behalf.
Q4: What Supreme Court case does Coin Center reference?
They cite Lowe v. SEC (1985), where the Court ruled that a publisher who does not hold client assets or act for them is protected by free speech and is not practicing a regulated profession.
Q5: How could this argument affect future crypto regulation in the U.S.?
If courts accept this First Amendment theory, it could limit regulators’ ability to prosecute developers solely for publishing code, potentially requiring Congress to pass new, specific laws to address illicit use of decentralized software. If rejected, developers may face continued legal risk, possibly driving innovation overseas.
This article was produced with AI assistance and reviewed by our editorial team for accuracy and quality.
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