The Republican National Convention has approved President Donald Trump's new platform for the Republican Party. The vast majority is standard Republican fare, with one big exception: a pro-innovation crypto policy. Trump’s commitment to defend Americans’ rights to mine Bitcoin (BTC), self-custody digital assets, and transact freely are welcome additions to the platform, but there was one piece sorely missing. That was a commitment to protect the developers of decentralized projects from government interference and the threat of criminal prosecution.
The Biden administration has been hostile to crypto companies from Ripple and Coinbase, but it has treated the developers of privacy-preserving technologies far worse. President Joe Biden’s Department of Justice has repeatedly prosecuted software developers for doing little more than building products that some malicious actors happened to use for nefarious purposes. Nowhere has this been more apparent than in the administration’s treatment of Roman Storm and Roman Semenov.
Storm and Semenov are two of the developers behind Tornado Cash, a fully decentralized protocol for private transactions on Ethereum (ETH). After the Tornado Cash protocol was used by bad actors — most notably the North Korean-backed Lazarus Group — to launder hundreds of millions of dollars worth of ETH, the U.S. Treasury Department sanctioned the protocol. While that decision was controversial, it was a far more reasonable response than what happened next. The Department of Justice indicted Storm and Semenov for conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money transmitting business. Semenov has yet to be brought into custody on these charges, but Storm is currently facing trial in New York.
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The prosecutions of Storm and Semenov are fraught on many levels. The prosecution inaccurately portrays the defendants' actions as executing transactions when Storm and Semenov only enabled individuals to execute their own transactions. Also, as Coin Center explained in an amicus brief in defense of Storm, publishing open-source software is protected speech under the First Amendment, and sanctions law should not apply.
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On a more fundamental level, prosecuting developers like Storm and Semenov for when their tools are misused by others sets a dangerous precedent that could stifle innovation in the realm of privacy-preserving technologies. Privacy-preserving tools like Tornado Cash are not inherently malicious; they can be used for both legitimate and illicit purposes. Punishing developers for potential misuse by others disregards the broader benefits these tools provide.
Trump’s new running mate JD Vance once slammed Gary Gensler’s approach to regulating #crypto as “the exact opposite” of what ideal policy should look like.pic.twitter.com/aoZOdhEaCi
— Cointelegraph (@Cointelegraph) July 16, 2024
Technologies such as zero-knowledge proofs, secure multi-party computation, and homomorphic encryption provide robust methods to protect personal data without compromising functionality. These technologies ensure that sensitive information remains confidential, even in the face of sophisticated cyber threats. It is for these reasons that the U.S. government has supported the development of privacy-preserving technologies such as Tor and Signal for decades.
Related: Trump's VP pick, JD Vance, could mean a new era for crypto
By targeting individuals for the mere act of writing and publishing privacy-preserving, open-source software, the government is sending a chilling message to developers: innovation in privacy and security is a potential liability. Developers may now hesitate to create tools that enhance privacy and security for fear of legal repercussions, stalling advancements in essential areas such as digital privacy and financial autonomy.
With the addition of Ohio Senator J.D. Vance to the Republican ticket, it’s clear that the Trump campaign is casting itself as pro-innovation and pro-crypto. Trump has railed against the Biden administration’s handling of the crypto industry in recent months and is scheduled to address a Bitcoin conference in Nashville on July . For his part, Vance has not left his Silicon Valley days totally behind him. He owns a substantial amount of Bitcoin and has worked on legislation during his time in the Senate that aims to bring regulatory clarity to the industry. While nothing is certain, all signs seem to indicate that a second Trump administration would have far better crypto-related policy than the current Biden administration, which has failed to provide much certainty or assurance to the crypto industry.
It is great to see that a second Trump administration would champion innovation and provide a more welcoming environment for the crypto industry. A second Trump administration should certainly defend the rights of Bitcoin miners, self-custodians, and people wishing to transact freely. But, if a second Trump administration truly wants to champion innovation and “end Democrats’ unlawful and unAmerican Crypto crackdown,” it must also commit to defending the rights of the people building the tools that allow all of these things to happen.
Luke Hogg is the director of policy and outreach at the Foundation for American Innovation. He holds a degree in government and data science from the College of William & Mary.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
