The Golden State Killer's case, which involved 13 murders, 67 sexual assaults, and 120 burglaries, was solved using Investigative Genetic Genealogy, a technology that combines forensic DNA analysis and genealogical research. This innovative approach led to the capture of the killer after over 30 years.
However, if lawmakers had overregulated or banned this technology, countless victims and their families would have been denied justice. This scenario highlights the importance of promoting innovation rather than punishing it. In areas like cryptocurrency, ambiguous rules and enforcement practices create confusion, stifling growth and driving industries underground or offshore, where 'bad actors' can exploit the law and target the vulnerable. As the District Attorney of Sacramento, with over 25 years of experience in holding people accountable for their crimes, it is clear that both prosecutors and the public need clarity on the laws that govern them.
The distinction between genuine criminals and industries caught in the crosshairs of a law not intended for them is crucial. Federal prosecutors have been misusing a statute against software developers who have never touched a customer's funds, operated a business in the traditional sense, or harbored criminal intent.
This is not justice, but overreach. The statute in question, 18 U.S.C. Section 1960, was designed to target money-transmitting businesses that handle other people's money and skirt licensing requirements, not to criminalize the writing of software. Yet, federal prosecutors have stretched this section to reach developers of noncustodial, peer-to-peer blockchain technology, which is a mistake.
The 'regulation-by-prosecution' approach to crypto development fails to provide clarity and chills open-source innovation, pushing many U.S. developers offshore. This approach unfairly saddles some with a criminal conviction and erodes American technological leadership in an area of significant financial innovation. The U.S.
share of open-source developers has fallen due to a lack of clear rules for software development. Every developer chased overseas is a loss for public safety, as they build infrastructure beyond the reach of U.S. oversight and law enforcement.
The good news is that there are signs of change, with the U.S. Department of Justice issuing a memorandum that makes clear it will not enforce pure regulatory violations under Section 1960.
However, a memo is not a statute, and prosecutorial guidance can change with administrations. The American innovation community and the public deserve clarity written into law, which is why the Promoting Innovation in Blockchain Development Act deserves serious support.
It restores the original intent of Section 1960, protecting the public from unlicensed financial intermediaries. There are genuine criminals who use digital assets for illicit purposes, and they should be prosecuted with the full weight of the law.
However, the answer is not to abandon the distinction between the tool and the criminal who wields it. Section 1960 remains a powerful instrument against genuine money-transmitting criminals in the digital asset space, and it should be used to target those who knowingly process criminal proceeds, operate to obscure illicit funds, or flout registration requirements while holding customer assets.
It should not be stretched to reach a software developer who wrote a peer-to-peer protocol and never held someone else's money. The rule of law protects communities from violent crime and innovators from overreach. As a child refugee from Vietnam who came to America with nothing but the belief that hard work and the rule of law are respected, it is clear that getting this distinction right is a basic obligation of the Federal Government. Section 1960 is a good law that has been misused in relation to decentralized finance technology development.
Fixing its application, targeting actual criminals, and letting American innovation breathe is what justice demands.