The government should promote innovation, not punish it

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The government should promote innovation, not punish itOpinion

Between 1974 and 1986, the Golden State Killer terrorized California, committing 13 murders, at least 67 sexual assaults, and over 120 burglaries across 11 areas. Then, just as suddenly as it began, the crime spree stopped, and the killer’s identity remained a mystery for more than 30 years. We finally identified him using a groundbreaking technique called Investigative Genetic Genealogy (IGG), which combines DNA analysis with family history research. I led the team that successfully prosecuted him. Since then, law enforcement agencies worldwide have used IGG to solve over a thousand previously unsolved cases. However, if lawmakers were to heavily regulate or even ban this technology, many victims and their families could be denied the justice they deserve.

Instead of discouraging new ideas, we should encourage them. When the rules around things like cryptocurrency are unclear or inconsistently enforced, it creates confusion and slows down development. This pushes these industries into hidden or overseas markets, allowing criminals to take advantage of the situation and harm innocent people – and often escape consequences.

After over 25 years as Sacramento’s District Attorney, I’ve dedicated my career to holding people accountable for their actions. I’ve handled a wide range of cases, from violent crimes like gang activity and hate crimes, to complex financial crimes, corruption, and even high-tech offenses. Having also worked on crafting legislation, I understand how important it is for both those of us in law enforcement, and the public, to have clear and understandable laws. I’ve seen firsthand what constitutes real criminal behavior, and I can distinguish between someone intentionally breaking the law and an industry simply caught up in regulations that weren’t designed for them.

This difference is crucial today. Federal prosecutors are increasingly using a law in ways that target software developers who haven’t handled customer money, run a typical business, or intended to commit a crime. Having spent my career dedicated to fairness, I believe this isn’t justice – it’s an abuse of power.

A law called 18 U.S.C. Section 1960 was created to regulate businesses that handle and transfer money for others – like check-cashing stores and wire transfer services – and to ensure they follow rules meant to prevent illegal money laundering. It was intended to enforce licensing requirements under the Bank Secrecy Act, specifically targeting traditional money service businesses, and it worked well for that purpose. However, this law was never intended to make creating software a crime.

That’s exactly what’s happening now. Federal prosecutors are using a law called Section 1960 in a way it wasn’t intended, applying it to creators of blockchain technology that allows direct, peer-to-peer transactions. These developers simply built open-source tools to automate deals between people who willingly choose to trade with each other. They never handled any user money, didn’t have traditional customers, and couldn’t control or change anyone’s transactions. Because neither the developers nor their software actually manages other people’s funds, charging them under a law meant for banks and other financial institutions is a flawed approach. As prosecutors, we have a responsibility to charge people based on their actual actions and under laws that legitimately apply to those actions.

Treating crypto development as a criminal matter is proving to be a serious mistake. This tactic stifles innovation, causing many U.S. developers to move their work to other countries. It unfairly leads to criminal convictions and weakens America’s position as a leader in financial technology. The number of open-source developers in the U.S. has already dropped from 25% in 2021 to 18% in 2025, largely because of the lack of clear regulations. When we drive developers away, we lose the ability to oversee the technology they build and to enforce laws if problems arise.

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

Fortunately, things are starting to improve. In April 2025, the U.S. Department of Justice (DOJ) released a statement outlining plans to end…

The Department of Justice (DOJ) clarified its stance on enforcing regulations, stating it won’t pursue cases based solely on regulatory violations under Section 1960. Following this announcement, the DOJ specified it won’t approve new charges under this section if the software is genuinely decentralized, only facilitates direct transactions between users, and doesn’t involve a third party controlling user funds – which is consistent with existing legal requirements.

As an analyst, I’ve been following the evolving landscape of blockchain regulation, and it’s become clear that guidance from the Department of Justice, while helpful, isn’t enough. These policies can shift with each new administration or U.S. Attorney, creating uncertainty for innovators and the public. That’s why I believe the Promoting Innovation in Blockchain Development Act currently before Congress is so important. It aims to solidify the original purpose of Section 1960 – protecting people from illegal financial operations – by enshrining it in law, offering the clarity and stability the American blockchain community needs.

I understand that criminals exploit digital assets for illegal activities like money laundering and fraud – I’ve personally prosecuted these cases. I strongly support going after these criminals with the full force of the law. However, we shouldn’t blame the technology itself. Just like we don’t hold email providers responsible for fraud committed through email, we need to focus on identifying and prosecuting the individuals committing the crimes, based on solid evidence.

Section 1960 is still a strong tool for going after criminals who actually move money illegally using digital assets. It targets things like exchanges that knowingly handle ill-gotten funds, centralized mixers designed to hide money, and platforms that avoid registering with FinCEN while managing customer assets. However, the law shouldn’t be used against someone like a software developer who simply created a way for people to exchange cryptocurrency directly, without ever controlling the money themselves.

I arrived in this country as a young refugee from Vietnam, carrying only my family and the hope that America values hard work and a fair legal system. That legal system works both ways: it keeps our communities safe by prosecuting crime, but also safeguards people with new ideas from unfair actions.

I lead a large District Attorney’s Office with almost 500 employees, handling around 30,000 cases annually. Having spent 25 years in courtrooms as the head of the second-largest DA’s office in Northern California, I’ve dedicated my career to representing victims and those who need a voice. I strongly believe the federal government has a fundamental duty to clarify and correctly apply regulations. While Section 1960 is a well-intentioned law, it’s currently being misapplied to innovators in the decentralized finance space. We need to correct this application, focus on actual criminals, and allow American innovation to flourish. That’s what justice requires, and I will continue to fight for it.

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2026-05-04 19:36