Fostering Innovation, Not Hindering It

The sudden cessation of the Golden State Killer's crimes in California, which included 13 murders, numerous sexual assaults, and burglaries, remained a mystery for over 30 years until the case was solved using Investigative Genetic Genealogy (IGG). This innovative technology, combining forensic DNA analysis and genealogical research, led to the capture of the perpetrator and has since been used to solve over a thousand cold cases worldwide. However, overregulation or a ban on IGG would have denied justice to countless victims and their families. The same principle applies to other areas, such as cryptocurrency, where ambiguous rules and enforcement practices create confusion, stifling growth and driving industries underground or offshore, allowing 'bad actors' to exploit the law and target the vulnerable. As a seasoned prosecutor, I have seen the importance of clarity in the law, having spent over 25 years holding individuals accountable for various crimes, including gang-related activities, hate crimes, and high-tech offenses. The distinction between genuine criminals and industries caught in the crosshairs of misguided laws is crucial. Federal prosecutors have been misapplying a statute against software developers who have never handled customer funds or operated a traditional business, and have never had criminal intent. This is not justice, but overreach. The original purpose of 18 U.S.C. Section 1960 was to target money-transmitting businesses that skirt licensing requirements, not to criminalize software development. The 'regulation-by-prosecution' approach to crypto development is misguided and chills innovation, driving developers offshore and eroding American technological leadership. The U.S. share of open-source developers has fallen due to a lack of clear rules, resulting in a loss of oversight and law enforcement capabilities when something goes wrong. Fortunately, the United States Department of Justice has issued a memorandum ending 'regulation-by-prosecution,' making it clear that the DOJ will not enforce pure regulatory violations under Section 1960. However, this is not enough, and the law needs to be clarified to protect innovation. The Promoting Innovation in Blockchain Development Act, currently before Congress, deserves support as it restores the original intent of Section 1960. I am not naive about the existence of bad actors who use digital assets for illicit purposes, and I support robust enforcement against these criminals. However, we must not abandon the distinction between the tool and the criminal who wields it. Section 1960 remains a powerful instrument against genuine money-transmitting criminals, and it is crucial that we target the actual bad actors, not software developers who have done nothing wrong. As a child refugee from Vietnam, I believe in the importance of respecting the rule of law, which protects both communities from violent crime and innovators from overreach. As a prosecutor, I have sworn to represent victims and the vulnerable, and I believe that getting this distinction right is a basic obligation of our Federal Government. It is essential that we fix the application of Section 1960, target the actual criminals, and allow American innovation to thrive.