Coin Center argues that software code should be protected as free speech under the First Amendment, emphasizing developers' rights.
Coin Center, represented by Peter Van Valkenburgh and Lizandro Piper, asserts that software code should be recognized as a form of free speech protected by the First Amendment of the U.S. Constitution. Their recent report emphasizes that developers should be regarded as authors and inventors rather than mere intermediaries.
Van Valkenburgh encouraged legal professionals to consider how the Supreme Court views software, highlighting the need for strict constitutional protections for code.
The report argues that the act of writing and publishing code is comparable to authorship in other artistic forms, deserving robust legal protections. The First Amendment guarantees developers the right to express themselves through code without the burden of pre-registration or licensing requirements, which they argue constitutes an unconstitutional prior restraint on free expression.
Clarifying Developer Roles
Van Valkenburgh and Piper aim to help legal systems differentiate between the publication of code and the regulatory activities of software developers. They clarify that regulation should apply only when a developer directly manages user assets or engages in transactions on behalf of users.
“Lower courts often conflate execution with expression, which weakens the First Amendment protections for code,” the experts stated.
They contend that some judges mistakenly interpret code execution as a functional activity rather than an expressive one. Citing the Supreme Court's 1985 ruling in Lowe v. SEC, they assert that publishers who do not manage client funds are entitled to First Amendment protections.
Avoiding Misclassification of Programmers
The rise of cryptocurrency protocols has reduced reliance on traditional intermediaries. With self-custody and peer-to-peer transactions, the need for central oversight diminishes. However, traditional financial entities, which act on behalf of users, remain subject to regulatory scrutiny.
Van Valkenburgh and Piper argue that the complexities of regulating emerging technologies should not lead to an unfair classification of software developers as intermediaries. They assert that blockchain projects should be governed by established First Amendment principles rather than the creation of new legal frameworks.
“It is crucial to apply existing legal principles to these new technologies in good faith,” they concluded.
As software becomes a vital medium for communication and economic organization, the importance of protecting code as speech is increasingly relevant. The Coin Center experts emphasize that licensing should not inhibit the freedom to express ideas through code.
Background Context
For years, crypto developers have sought legal safeguards against prosecution for their code. A notable case involved Roman Storm, co-founder of the cryptocurrency mixer Tornado Cash, who was convicted for conspiracy related to unlicensed money transfers. This verdict has faced criticism from various legal experts, including Ethereum co-founder Vitalik Buterin, who defended Storm's intentions.
The defense is challenging the conviction, invoking the Supreme Court's decision in Cox Communications v. Sony Music Entertainment to argue that Storm did not knowingly engage in criminal activity. Meanwhile, the U.S. Department of Justice has indicated a shift in policy, stating it will no longer prosecute DeFi developers under the unlicensed money transfer statute, although the legal implications remain uncertain.
