Legal Pressure on Privacy Tools Raises Fears for Crypto Developers

[encrypted]

The regulatory climate for privacy-focused crypto tools has grown increasingly tense, raising concerns among developers and industry advocates.

US authorities have brought criminal cases against developers linked to non-custodial services such as Samourai Wallet and Tornado Cash, alleging unlicensed money-transmitting activity and facilitation of illicit fund flows. In several cases, developers have faced criminal charges, convictions in related proceedings, or ongoing legal exposure.

These actions have intensified fears that publishing or maintaining open-source, privacy-enhancing software could be treated as a criminal offense, even when developers do not control user funds.

The issue has become central to the ongoing crypto market structure debate in Washington, with industry groups urging lawmakers to provide explicit protections for DeFi and non-custodial software developers to prevent innovation from moving offshore.

[bonk]

regulatory clarity around privacy tools = long-term bullish for DeFi adoption. devs staying in the US keeps talent and products local