The release of Ross Ulbricht and the lifting of sanctions on Tornado Cash mark crucial moments for the crypto community. It is more than symbolic. It is an opportunity to clearly change the image of the United States as a safe place to build the Internet of money.
Ross’s freedom comes after more than a decade of incarceration, a journey defined by relentless advocacy, legal battles, and the unwavering support of the crypto community. Its launch is very important to me because more than a decade ago I launched Silk Road 2.0, the successor to its site.
However, his double life sentence without parole was not only due to the Silk Road. It symbolizes the US government’s resistance to the blockchain industry and the idea of a financial system controlled by individuals rather than large banks.
The US dollar is the world’s reserve currency; and cryptocurrencies have given the world democratized access to this reserve through stablecoins. Satoshi Nakamoto announced Bitcoin as a “peer-to-peer electronic cash system,” and Silk Road was the first to execute that vision. Silk Road opened the door to cryptocurrencies and introduced Silicon Valley (and many other groups) to bitcoin. It spawned companies like Coinbase, projects like Ethereum, and paved the way for stablecoins, which are not yet private.
Still, there is no legitimate market to buy and sell things with bitcoin. The reputation of our industry is that we are highly speculative and rife with scams. We cannot forget that Satoshi created bitcoin for payments, not for speculation. America can’t miss out on the Internet of Money. During previous administrations, global developers were nervous about even attending conferences hosted here. This has consequences for the US crypto industry. Ross’s post is a clear sign that the United States is no longer a scary place to innovate in cryptocurrencies. Their experience underscores the need for proportionate justice and serves as a reminder of the human cost of overreaching in the regulation of innovation.
Read more: Silk Road founder Ross Ulbricht pardoned by President Trump
His release is an opportunity to reflect: celebrate his freedom while keeping a clear view of the past. Ultimately, his harsh sentence hindered bitcoin innovation for all of us. We must ensure that your case becomes a catalyst for constructive change rather than a footnote in a story of missed opportunities, a series of memecoins, or a divisive narrative that further erodes trust.
Similarly, the case of Tornado Cash founder Roman Storm, who is still in legal jeopardy, clearly shows the dangers of criminalizing innovation. Tornado Cash offers a critical feature (a “mixer”) to enable private Ethereum transactions, an essential component of conducting business competitively.
It’s important to build privacy technologies, but we also need to understand the line between legal and illegal use cases. Yes, launch the Silk Road, but do not allow the sale of drugs on it. Start Tornado Cash, but don’t encourage money laundering. The chilling effect both cases have had on developers like me cannot be underestimated. Privacy innovators in the United States and abroad are now questioning their work, fearing legal repercussions for creating tools that protect privacy.
And what do you do when you launch something decentralized that takes on a life of its own? The Fifth Circuit Court found the Tornado Cash sanctions illegal, but the Justice Department dismissed the ruling as irrelevant. The developers of Tornado Cash were allegedly aware of its misuse for money laundering, but did not act decisively to address it. On a decentralized platform, should your initial developers be responsible for user activity? There is a clear need for the United States to define a “Section 230” so that decentralized software developers are not criminally responsible for what their users do on their platforms. (“Section 230” refers to a law that exempts social media platforms from liability for content posted on their networks.)
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As businessman and politician Vivek Ramaswamy said: “You can’t go after code developers. “What you really need to do is go after individual bad actors who break the laws that already exist.”
To move forward as an industry, we must separate the tools from the misuse of those tools. Privacy technologies such as Tornado Cash, Monero and Zcash are unfairly stigmatized due to their potential use for illicit activities. But they have transformative potential for legitimate use cases, from protecting personal financial data to enabling secure business transactions.
Zcash, with its optional secured transactions, provides individuals and businesses with the ability to conduct private and secure transactions while remaining compliant with anti-money laundering (AML) and know-your-customer (KYC) regulations. These innovations bridge the gap between cryptocurrencies and traditional industries, allowing businesses to adopt cryptocurrencies without exposing sensitive financial details.
Privacy technology like Zcash also addresses a fundamental flaw in bitcoin and other publicly ledger cryptocurrencies: the exposure of transaction data that creates competitive disadvantages and privacy risks. Soon, Zcash will be on Mayachain, allowing for a decentralized way to convert between bitcoin and Zcash. It will also soon support ZSA (protected assets), allowing stablecoins to be issued privately for the first time.
The new administration has proposed a national “Bitcoin Strategic Reserve,” but this raises questions about privacy and decentralization. Unlike other reserves, such as gold, the Bitcoin blockchain reveals deposits and withdrawals to the public forever. Is the Trump Administration aware of this? This level of transparency is a double-edged sword, making privacy technologies even more essential to maintaining competitive and strategic advantages.
So where do we go from here? Bitcoin and the broader cryptocurrency industry are at a crossroads. Now is the time to refocus on the principles that drove early adoption: perceived privacy, financial freedom, and most importantly, peer-to-peer payments.
The US crypto landscape, currently a mess of regulatory uncertainty, scams and crashes, needs a reassessment. Instead of demonizing privacy innovations, policymakers should work with developers to create clear and enforceable standards for the responsible use of “e-cash.” This means proactive education and collaboration with regulators, more investment in privacy technologies, and development of a regulatory framework that encourages blockchain innovation in the United States.
