The Republican National Convention has endorsed former President Donald Trump’s new platform, highlighting a significant shift towards a pro-innovation stance on cryptocurrency.
The platform includes commitments to defend Americans’ rights to mine Bitcoin, self-custody digital assets, and transact freely. However, one crucial element is missing: protection for developers of decentralized projects from government interference and criminal prosecution.
Biden Administration’s Hostile Stance on Crypto
However, the cryptocurrency industry has faced significant hostility from President Joe Biden’s administration, with Ripple and Coinbase among the attacked companies.
The Department of Justice (DOJ) has been particularly assiduous with the developers of privacy-preserving technologies. Notably, Roman Storm and Roman Semenov, the developers of Tornado Cash, have encountered drastic legal consequences.
The U.S. Treasury Department sanctioned Tornado Cash, a decentralized protocol for private Ethereum transactions, due to its use by the Lazarus Group and other nefarious actors for money laundering.
The DOJ indicted Storm and Semenov on conspiracy charges to commit money laundering and sanctions violation, although they were not the main architects of the software.
While these prosecutions might be legitimate, critics claim they distort developers’ intentions and pose a risk to innovation in privacy-enhancing technologies. Simply releasing open-source software is a form of free speech protected under the First Amendment, but sanctions law applied to developers is nonetheless worrisome.
Privacy-Preserving Technologies and their Proelium
Tornado Cash and other privacy tools are beneficial and serve data privacy and confidentiality purposes. Features like zero-knowledge proofs and homomorphic encryption are crucial for protecting personal data.
The U.S. government has traditionally funded the creation of similar applications, such as Tor and Signal, that increase users’ privacy and secure communication. However, it is a slippery slope when the state prosecutes developers for future hypothetical misuse of their own tools, thus menacing and stifling innovation in key areas such as consumer protection and financial sovereignty.
Trump’s Pro-Innovation Stance
Ohio Senator J.D. Vance’s joining Trump’s campaign signals a pro-innovation and pro-crypto stance. A Bitcoin owner and former Silicon Valley professional, Vance has worked on legislation to provide regulatory clarity for the crypto industry.
Trump has criticized the Biden administration’s handling of the crypto sector and is scheduled to speak at a Bitcoin conference in Nashville. Unlike the current leadership regime, his campaign policies promise a more friendly environment for the actualization of cryptocurrencies.
The Need for Developer Protection
Although the regulations included in Trump’s platform endorse commendable goals to protect the rights of Bitcoin miners and users, they lack provisions for the rights of decentralized application developers.
Due to the lack of guarantees of freedom from governmental intervention and criminal charges, the advances within the crypto sphere are still unpredictable.
Hence, a second Trump administration must devote itself to supporting the rights of developers who work on the technologies that facilitate Bitcoin mining, self-wallet custody, and free transactions. These developers must be safeguarded to make the virtual currency arena safe and more conducive to innovation.
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