Coin Center says publishing crypto code is protected speech under the First Amendment
A new report argues regulation should hinge on developers controlling assets or executing transactions, not writing software.
Coin Center published a new report arguing that writing and publishing crypto software code is “functional” free speech protected by the First Amendment. The paper proposes a conduct-based test for when developers should face regulation, landing amid heightened US enforcement risk tied to privacy and wallet tooling.
Key Takeaways
- Publishing crypto software code is framed as comparable to publishing a book or a recipe, with First Amendment protection for developers who only publish and maintain software.
- A proposed bright-line test ties regulation to conduct like controlling user assets, executing transactions for users, or making decisions on users’ behalf.
- The report rejects the idea that executable software should receive weaker speech protection, arguing Supreme Court jurisprudence supports treating code publication as “pure speech.”
- The framework arrives after convictions tied to alleged unlicensed money transmission, including Tornado Cash developer Roman Storm and the Samourai Wallet co-founders, who received four-to-five-year sentences.
Coin Center’s First Amendment Claim: Publishing Crypto Code as Protected Speech
Coin Center Executive Director Peter Van Valkenburgh and Director of Research Lizandro Pieper published a report described as released Monday arguing that writing and publishing crypto software code should be treated as protected speech under the First Amendment.
The report’s core analogy is intentionally plain. Publishing code is positioned as akin to writing a book or publishing a recipe, with constitutional protection attaching to developers who publish and maintain software rather than operate a financial service.
The authors also warn that forcing developers into pre-approval regimes would function as prior restraint, a legal concept that generally bars the government from requiring licensing or pre-registration before speech occurs. In the report’s words: “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.”
The Bright-Line Test: When Developers Cross Into Regulated Conduct
Coin Center’s practical move is to narrow developer liability by separating publication from operational roles that resemble intermediation. The report argues a developer crosses into regulatable conduct when they control user assets, execute transactions for users, or make decisions on users’ behalf.
That line matters for self-custody and peer-to-peer transaction tooling, where the software can remove the need for a central party to hold funds or push transfers. The report argues regulators should not treat developers as middlemen for “administrative convenience” when the product design is explicitly meant to avoid custody and agency relationships.
For market participants, this is less about abstract constitutional theory and more about where enforcement risk can attach. If prosecutors and regulators lean into a conduct-based test, non-custodial software looks less like a licensing target, while products that add transaction execution, asset control, or user-directed decision-making start to look like regulated services.
The ‘Functional Code’ Debate and Lowe v. SEC as Legal Backbone
The report directly challenges what it calls a “functional code theory of diminished First Amendment protection,” which treats executable software as closer to conduct because it can produce real-world effects. Van Valkenburgh and Pieper write: “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,” adding, “Some courts have suggested that because software can be executed to produce real-world effects, it resembles conduct rather than speech.”
Coin Center’s rebuttal is that publication remains speech even when the output is functional. “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,” the report says.
To anchor that claim, the authors cite Lowe v. SEC (1985), where the Supreme Court found that a publisher that does not hold assets on behalf of a client or take action on a client’s behalf is protected by free speech and is not practicing a regulated profession. The report leans on that publisher-versus-professional-services distinction to argue that non-custodial software publication should sit outside licensing regimes.
Signals That Could Shift US Policy on Privacy Tools and Self-Custody Software
The immediate stress test is in court, not Congress. Roman Storm was convicted last year on charges of conspiracy to operate an unlicensed money-transmitting business. His lawyers are working on a motion to dismiss using Cox Communications Inc. v. Sony Music Entertainment to argue he lacked intent to participate in the alleged crimes.
The Samourai Wallet co-founders were found guilty on the same charge and sentenced to between four and five years in prison.
Traders should watch for four signals. First, any filings or rulings tied to Storm’s planned motion to dismiss and whether intent standards become central in developer-liability arguments. Second, further legal developments or appeals connected to the Samourai convictions and sentencing. Third, whether regulators or prosecutors start explicitly using a “control of assets/transaction execution” test when describing when software developers become money transmitters or regulated intermediaries. Fourth, any new guidance or enforcement posture that treats publishing or maintaining code itself as regulatable conduct, which would directly collide with Coin Center’s framework.
Marcus Hale’s Take: Why This Framework Matters for Protocol Risk and Listings
I read Coin Center’s report as an attempt to force a clean market-structure distinction: publishing rails versus operating the service. The threshold that matters is whether a team is actually in the flow of funds or decision-making, because that is the point where enforcement can spill over into exchange listings, front-end access, and the willingness of counterparties to touch the asset.
This looks more like a sentiment catalyst than a fundamental shift until prosecutors or regulators start describing their own tests in the report’s terms. If the “control of assets or transaction execution” line holds in filings and rulings, the setup starts to look structural rather than narrative-driven, and that is when protocol risk begins to reprice in a way traders can’t ignore.
