Crypto lobby Coin Center expanded its argument that software code is speech protected by the First Amendment, amid ongoing uncertainty over developers’ liability for how their creations are used.
In a report published Monday, Coin Center executive director Peter Van Valkenburgh and director of research Lizandro Pieper argued that writing and publishing crypto software is equivalent to writing a book or publishing a recipe. They said the First Amendment offers strict constitutional protection for developers who only publish and maintain software.
“They are speakers and inventors, not agents, custodians, or fiduciaries. 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,” they wrote.
Crypto developers have sought legal protections to shield themselves from criminal liability over the software they create. Last year brought high-profile convictions of developers based on how their software was used, including the Tornado Cash developer Roman Storm.
Van Valkenburgh and Pieper said their paper aims to provide a framework for courts and regulators to distinguish protected software publication from a developer’s professional conduct. They argued a developer crosses into regulatable conduct when they control user assets, execute transactions for users, or make decisions on users’ behalf.
“Lower court confusion over the distinction between conduct and speech naturally found in software publishing has fueled the development of what might be called a functional code theory of diminished First Amendment protection,” they wrote. “Some courts have suggested that because software can be executed to produce real-world effects, it resembles conduct rather than speech. We argue that such activities are pure speech and that the Supreme Court’s existing jurisprudence insists on this interpretation even if some lower courts have gone astray.”
They cited the 1985 Supreme Court decision in Lowe v. SEC, which found that a publisher who does not hold assets for clients or act on a client’s behalf is protected by free speech and is not practicing a regulated profession.
The authors warned against treating developers as scapegoats simply because crypto can remove traditional intermediaries. Self-custody and peer-to-peer transactions can eliminate the need for a central authority to hold or send funds, but governments typically regulate intermediaries that act on users’ behalf and require licenses.
While acknowledging the difficulty of regulating new technology, Van Valkenburgh and Pieper said inventing legal doctrines or declaring developers to be middlemen for “administrative convenience” is not the solution. “Crypto software does not necessitate the invention of new legal doctrines or novel carveouts. It requires the faithful application of settled First Amendment principles to a new technological context,” they added.
“In the age of computers, where software is the primary means for expressing ideas and organizing economic life, those principles matter more, not less. Writing and publishing code is speech. And in a free society, speech cannot be licensed into silence.”
Storm was convicted last year on charges of conspiracy to operate an unlicensed money-transmitting business; his lawyers have been working on a motion to dismiss using Cox Communications v. Sony Music Entertainment to argue he lacked intent to participate in the alleged crimes. The co-founders of Samourai Wallet were also found guilty on similar charges and sentenced to four to five years in prison.
Coin Center’s report urges courts and regulators to apply established First Amendment doctrine when assessing the legal boundaries between publishing code and engaging in regulated financial conduct.
