Fostering Innovation, Not Hindering It

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 innovation led to the resolution of over a thousand cold cases worldwide. However, overregulation or a ban on such technology would have denied justice to numerous victims and their families. The same principle applies to areas like cryptocurrency, where unclear rules and enforcement practices create confusion, stifling growth and driving industries underground or offshore. This allows genuine criminals to exploit the law and target vulnerable individuals. As the District Attorney of Sacramento, with over 25 years of experience in holding people accountable for their actions, it is essential to distinguish between real crime and industries caught in the crossfire of laws not intended for them. The federal prosecutors' use of a statute against software developers who have not committed any traditional crime is an example of overreach. Congress enacted 18 U.S.C. Section 1960 to target money-transmitting businesses that handle other people's money and skirt licensing requirements. However, this law has been misused to criminalize the development of noncustodial, peer-to-peer blockchain technology. The 'regulation-by-prosecution' approach to crypto development is misguided and chills innovation, pushing many U.S. developers overseas. This approach undermines American technological leadership in financial innovation and public safety. The U.S. Department of Justice's recent memorandum, 'Ending Regulation-by-Prosecution,' is a step in the right direction, as it clarifies that the DOJ will not enforce pure regulatory violations under Section 1960. Nevertheless, a memo is not a substitute for a statute, and the American innovation community deserves clarity written into law. The Promoting Innovation in Blockchain Development Act, currently before Congress, aims to restore the original intent of Section 1960 and provide the necessary clarity. It is crucial to differentiate between the tool and the criminal who wields it, rather than abandoning this distinction. Section 1960 remains a powerful instrument against genuine money-transmitting criminals in the digital asset space. The law should be used to target custodial exchanges, centralized mixers, and platforms that flout FinCEN registration, rather than software developers who have never held someone else's money. As a child refugee from Vietnam who has sworn to represent victims and the vulnerable, it is essential to get this distinction right and protect innovators from overreach. Fixing the application of Section 1960 and targeting actual criminals will allow American innovation to thrive, which is what justice demands.