Crypto Organizations Caution: Guilty Verdict May Turn Code Expression Into a Crime

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Crypto Organizations Caution: Guilty Verdict May Turn Code Expression Into a Crime

Bitget-RWA2025/11/20 23:16

By:Bitget-RWA

- Over 65 crypto groups urge Trump to intervene in Tornado Cash co-founder Roman Storm's legal case, arguing code should be protected speech under the First Amendment. - Storm faces charges for operating an unlicensed money transmittal service, with his defense citing recent DOJ guidance against prosecuting decentralized software developers. - Advocates demand tax clarity for crypto staking/mining and SEC safe harbor rules, aligning with Trump's "Crypto Capital" campaign promises and Zhao's pardon. - DOJ m

Over 65 organizations supporting cryptocurrency and blockchain have increased their calls for U.S. President Donald Trump to step in regarding the legal proceedings against Roman Storm, one of the creators of the Tornado Cash DeFi protocol. Among these organizations are the Solana Policy Institute, Blockchain Association, and DeFi Education Fund,

asserting that Storm’s conviction

for running an unlicensed money transfer operation threatens First Amendment rights related to open-source software creation. In a letter dated November 20,

the alliance further called for clearer regulations

on digital assets and urged that the charges against Storm be dropped. Storm is currently out on bail, awaiting a court hearing set for January 22.

In August 2023, Storm was found guilty on one of three counts: conspiring to operate an unlicensed money transmitting business. The jury could not reach a verdict on two other charges involving money laundering and violating sanctions

as reported

. Storm’s attorneys argue that Tornado Cash, which is designed to enhance privacy by obscuring crypto transactions, should be considered protected speech under the First Amendment and not treated as a financial offense

according to the organizations

. The advocacy groups referenced recent Department of Justice (DOJ) guidance from earlier this year, which instructs prosecutors not to charge developers of decentralized software with unlicensed money transmission

according to the organizations

. Although this guidance is not retroactive, Storm’s legal team plans to cite it in their appeals.

Crypto Organizations Caution: Guilty Verdict May Turn Code Expression Into a Crime image 0

The letter sent to Trump also included broader policy recommendations, such as clarifying tax rules for digital assets and ensuring protections for DeFi developers. The groups asked the Treasury and IRS to specify that taxes on staking and mining rewards should only apply when assets are sold, not when they are created, and to exclude transactions under $600 from capital gains tax calculations

as stated by the coalition

. They also urged the Securities and Exchange Commission (SEC) to implement safe harbor policies similar to those proposed by Commissioner Hester Peirce, which would give token projects a three-year window to decentralize before being subject to securities regulations

as stated by the coalition

. These proposals are consistent with Trump’s campaign pledges to make the U.S. the “Crypto Capital of the World” and his recent pardon of Binance founder Changpeng Zhao

as stated by the coalition

The DOJ’s position on the matter remains unclear. In October, Matthew Galeotti, the acting assistant attorney general for the DOJ’s criminal division, remarked at a crypto advocacy event that “simply writing code, without malicious intent, does not constitute a crime”

according to reports

. Despite this, prosecutors have opposed Storm’s request for acquittal, and the interim U.S. attorney for the Southern District of New York has moved to retry him on the unresolved charges

according to reports

. The ongoing tension between prosecutorial discretion and political involvement underscores the complex situation the administration faces,

according to reports

The resolution of Storm’s case could influence how U.S. authorities approach open-source software in the crypto industry. If the DOJ drops the charges, it would support the view that code is a form of protected speech. On the other hand, a conviction could discourage developers from building privacy-oriented tools and increase regulatory ambiguity. As the crypto sector looks for guidance on tax and enforcement issues,

how the administration responds

to the coalition’s appeals is likely to have a significant impact on the industry’s direction in the next year.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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