The government should promote innovation, not punish it

The "regulation-by-prosecution" approach to crypto development fails that test badly. This approach chills open-source innovation, pushing many U.S. developers offshore. This unfairly saddles some with a criminal conviction and erodes American technological leadership in an area of consequential financial innovation. The U.S. share of open-source developers fell from 25% in 2021 to 18% in 2025, driven by a lack of clear rules for software development. Every developer we chase overseas is a developer who now builds infrastructure beyond the reach of U.S. oversight and beyond the reach of U.S. law enforcement when something does go wrong.

That is not a win for public safety; that is a self-inflicted wound.

The good news is that some of this is beginning to change. In April of 2025, the United States Department of Justice (DOJ) issued a memorandum entitled "Ending

Regulation-by-Prosecution," making clear that the DOJ will not enforce pure regulatory violations under Section 1960. Following the memo, the DOJ announced it would not approve new Section 1960 charges "where the evidence shows that software is truly decentralized and solely automates peer-to-peer transactions, and where a third party does not have custody and control over user assets." That is what the law has always required.

But neither a memo nor a speech is a statute. Prosecutorial guidance can change with administrations and with U.S. Attorneys. The American innovation community and the public deserve clarity written into law. That is why the Promoting Innovation in Blockchain Development Act now before Congress deserves serious support. It restores the original intent of Section 1960: protecting the public from unlicensed financial intermediaries.

I am not naive about bad actors - there are genuine criminals who use digital assets to launder money and defraud victims. I have prosecuted them. I support robust enforcement against these criminals with the full weight of applicable law. The answer here is simply not to abandon the distinction between the tool and the criminal who wields it. We don't charge email providers for wire fraud. We identify the actual bad actor, build the case and prosecute with evidence.

Section 1960 remains a powerful instrument against genuine money-transmitting criminals in the digital asset space. Custodial exchanges that knowingly process criminal proceeds, centralized mixers operated specifically to obscure illicit funds, platforms that flout FinCEN registration while holding customer assets – these are legitimate targets, and the law reaches them. It does not need to be stretched to reach a software developer in a Sacramento apartment who wrote a peer-to-peer protocol and never held a dime of someone else's money.

I came to this country as a child refugee from Vietnam, with nothing but my family and the belief that America rewards hard work and respects the rule of law. The rule of law cuts both ways. It protects communities from violent crime, but it also protects innovators from overreach.

I run an office of nearly 500 employees that prosecutes nearly 30,000 cases a year. As the head of the second-largest District Attorney’s Office in Northern California, I have stood in courtrooms for 25 years and sworn to represent victims, the vulnerable and the voiceless. I believe that getting this distinction right should be a basic obligation of our Federal Government. Section 1960 is a good law that has been misused in relation to those involved in developing truly decentralized finance technology. Fix the application, target the actual criminals and let American innovation breathe. That is what justice demands, and that is what I will keep fighting for.