You can provide services in this 'world crypto capital', but you might only see this world from prison.
Written by: L0La L33Tz
Compiled by: AididiaoJP, Foresight News
Trump is far from a 'pro-Bitcoin' president. Although the SEC has dropped some of the most aggressive cases, there are still legal risks associated with building non-custodial and privacy-enhancing technologies in the United States. You might be able to provide services in this 'world crypto capital', but you might only see that world from inside a prison cell.
Donald Trump has been serving as the 47th President of the United States since January 20, 2025. As his term just passed the 200-day mark, it seems a good time to reflect on how this 'Bitcoin president' has paved the way for the U.S. to become its claimed 'world crypto capital', and where we might be headed in the future.
For the first time in Trump's second term, many prominent industry participants received favorable outcomes in the legal dilemmas faced under his predecessor's administration.
Terra/Luna founder Do Kwon reached a plea agreement with the DOJ, admitting to only two of the nine charges against him, which involved causing over $40 billion in losses to investors within days. The Second Circuit overturned the insider trading conviction of former OpenSea product manager Nathan Chastain. The U.S. Securities and Exchange Commission (SEC) dropped lawsuits against cryptocurrency exchanges Gemini and Coinbase, paused litigation against Binance, and allegedly concluded investigations into Consensys, Robinhood, and Uniswap.
Meanwhile, Tron founder Justin Sun previously faced not only charges from the SEC regarding offering unregistered securities but was also reportedly under investigation by the DOJ, and is now dining with the president.
On the regulatory front, things are also improving, from Ripple to Wyoming, everyone (and their stakeholders) is announcing plans to issue stablecoins, thanks to the only legislation to date that has become law: the (GENIUS Act). Although we still do not know how much Bitcoin the U.S. government holds, as clearly, 200 days is insufficient for a comprehensive audit, the cheers for a Bitcoin strategic reserve continue, though the government seems not to have an actual plan to purchase Bitcoin but will instead turn to confiscating Bitcoin from certain places.
Everyone is a money transmitter
Most notably, each of the aforementioned industry participants heavily relies on the development of open-source technology. Without open-source, none of the platforms mentioned could transact, let alone be built. And for developers of open-source technology, the president's plans seem far from optimistic, instead appearing quite grim.
In July, Samourai Wallet developers Keonne Rodriguez and William Hill pleaded guilty to charges of conspiring to operate an unlicensed money payment business, facing up to five years in federal prison. A week later, Tornado Cash developer Roman Storm was found guilty of the same crime by a jury in the Southern District of New York.
Both prosecutions occurred following a memo released by Deputy Attorney General Todd Blanche in April, which was widely praised and considered to end the Department of Justice's attempts to create new laws through prosecution, explicitly calling for the DOJ to no longer prosecute software developers for user behavior. Despite being well-received, the memo left such significant room for continued prosecutions that its reliability is almost akin to the Trump administration's promise to release the Epstein list.
Since then, developers' regulatory clarity has been at an all-time low. Based on the outcomes of the Samourai Wallet and Tornado Cash cases, non-custodial software developers may no longer be prosecuted for lacking a money transmission license, but they could be charged for transmitting illegal proceeds. So, are non-custodial software developers potential money transmitters facing criminal charges in the United States? Our guesses are the same.
The judgment against Roman Storm has set a so-called 'persuasive precedent', which means that anyone building non-custodial tools could potentially be charged with federal crimes at the discretion of the Department of Justice.
Introduce (the Patriot Act) to digital assets
In terms of digital asset legislation, the past few months have also been tumultuous. While the (GENIUS Act) is highly anticipated, arguably more by those in suits (industry insiders) and those who pay them (stakeholders), it has also opened the door for the application of the (Bank Secrecy Act), a law mandating anti-money laundering and know-your-customer (KYC) requirements.
While the (GENIUS Act) formally codifies certain rules for stablecoin issuers into financial institution regulations, the Treasury has since sought public input on the application of digital identity in so-called DeFi services, related to the (GENIUS Act), which will require non-custodial service providers to verify users' identity credentials before executing transactions.
Overall, the Treasury's idea is that its actions align with one of Trump's earliest executive orders on 'strengthening America's leadership in digital financial technology', which aimed to promote the 'responsible growth and use of digital assets, blockchain technology and related technologies', with the key term being 'responsible'.
Last month's first White House digital asset report ultimately revealed the implications of this 'responsible' growth, calling on Congress to create new subclasses for digital assets in the (Bank Secrecy Act) and urging the Financial Crimes Enforcement Network to consider follow-up steps to the Biden era mixing rules: this regulation would nearly stifle any possibility of transaction privacy, including the use of new, non-KYC addresses.
If this sounds unconstitutional to you, as in this country code is law, I regret to inform you that in the place we are heading, we will not need a constitution. Most of the ideas proposed by the president are governed by the (Patriot Act), which the White House has requested Congress to specifically extend to digital assets, and the (Patriot Act) always supersedes the constitution.
In short, the presidency of Bitcoin may sound great on paper, but in reality, the environment for software development in the United States has never been so hostile. If the Trump administration aims to genuinely fulfill its commitments to Bitcoin users, it must significantly change course.
Before this, when the government invited us to 'come home' and build our services in the world crypto capital, it seems we should proceed with caution, as you might only see it from inside a prison cell.
