A coalition of cryptocurrency organizations is contesting the U.S. Department of Justice’s expansive interpretation of money transmission regulations targeting open-source developers. Industry groups including Paradigm, the DeFi Education Fund, and the Blockchain Association argue this approach misconstrues the original intent of Section 1960 of title 18 U.S. Code and threatens innovation in decentralized finance.
The coalition maintains that prosecuting developers for publishing open-source code creates legal uncertainty and undermines the U.S. cryptocurrency ecosystem. This challenge emerges alongside high-profile enforcement actions such as US v. Storm and US v. Rodriguez, which targeted privacy tools including Tornado Cash.
Further complicating the regulatory landscape, Coin Center’s lawsuit challenging Treasury Department sanctions against Tornado Cash was recently dismissed. The combined enforcement pressures from both the DOJ and Treasury Department signal a pivotal moment for the U.S. crypto industry, with implications for future regulatory frameworks and global competitiveness.
Industry advocates warn that treating code publication as money transmission could establish dangerous precedents, potentially chilling developer participation and driving blockchain innovation offshore.