Coin Center: Crypto Code Is Protected Speech

Coin Center published a report Monday arguing that writing and publishing cryptocurrency software is protected speech under the First Amendment and that developers face regulation only when they take on custodial or transactional roles for users.

The report, written by Executive Director Peter Van Valkenburgh and Director of Research Lizandro Pieper, presents a legal framework intended to help courts and regulators distinguish expressive software activity from conduct that can be regulated. The authors contend that developers who only write, publish and maintain code are “speakers and inventors, not agents, custodians, or fiduciaries,” and that forcing pre-registration or licensing for such publication would amount to an unconstitutional prior restraint.

Van Valkenburgh and Pieper identify what they call a “functional code” theory in some lower court decisions that treats software primarily as conduct because it can produce real-world effects when executed. The report cites Supreme Court precedent, including the 1985 Lowe v. SEC decision, to argue that expressive software should receive First Amendment protection even if it can be run to perform actions.

The report draws a line between protected publication and regulatable professional conduct. It says regulation becomes appropriate when a developer controls user funds, executes transactions on behalf of users, or makes decisions that affect user assets. In those cases, the authors write, traditional financial regulation and oversight would apply.

The report comes after several criminal prosecutions of developers last year. Roman Storm, linked to the Tornado Cash project, was convicted on charges including conspiracy to operate an unlicensed money-transmitting business. Two co‑founders of the Samourai Wallet were also convicted on similar charges and received multi‑year prison sentences. Storm’s legal team filed a motion to dismiss that invokes the Supreme Court’s Cox Communications v. Sony Music Entertainment decision and challenges the intent element of the charges.

Coin Center warns against treating software creators as intermediaries for regulatory convenience, noting that self‑custody and peer‑to‑peer transactions reduce the role of traditional middlemen. The report offers a practical test for courts and policymakers to use when evaluating cases involving developers and recommends treating code publication as expression unless a developer deliberately assumes custody or transaction processing roles.

The authors state that applying settled First Amendment principles to software will allow regulators to target professional or custodial conduct while protecting ordinary publication of code. The report urges clearer legal standards to distinguish speech from conduct in software contexts.