The release of Ross Ulbricht and the lifting of sanctions against Tornado Cash mark pivotal moments for the crypto community. It’s more than symbolic. This is an opportunity to clearly redefine the United States as a safe place to build the Internet of Money.
Ross’s freedom comes after more than a decade of imprisonment – a journey defined by relentless advocacy, legal battles, and the crypto community’s unwavering support. Its release matters deeply to me because over a decade ago I launched Silk Road 2.0, the successor to its site.
But his double life sentence without parole wasn’t just about the Silk Road. It symbolized 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 cryptocurrency has given the world democratized access to this reserve via stablecoins. Satoshi Nakamoto announced Bitcoin as a “peer-to-peer electronic payment system,” and the Silk Road was the first to implement this vision. Silk Road opened the door to cryptocurrency and introduced Silicon Valley (and many other groups) to bitcoin. This gave rise to companies like Coinbase, projects like Ethereum, and paved the way for stablecoins, which are not yet private.
Yet there is no legitimate marketplace for buying and selling things with Bitcoin. Our industry’s reputation is that we are highly speculative and fraudulent. We cannot forget that Satoshi created Bitcoin for payments, not speculation. The United States cannot ignore the Internet of Money. During previous administrations, global developers had become nervous about even attending conferences held here. This has consequences for the US crypto industry. Ross’s post is a clear signal that the United States is no longer a scary place to innovate in cryptocurrencies. His experience highlights the need for proportionate justice and serves as a reminder of the human cost of excessive regulation of innovation.
Read more: Silk Road founder Ross Ulbricht pardoned by President Trump
His release is an opportunity to reflect, to celebrate his freedom while keeping a lucid eye on the past. Ultimately, his harsh sentence hindered Bitcoin innovation for all of us. We must ensure that his case becomes a catalyst for constructive change rather than a footnote in a story of missed opportunities, a series of memecoins, or a narrative of division that further erodes trust.
Likewise, the case of Tornado Cash founder Roman Storm – who remains in legal jeopardy – clearly shows the dangers of criminalizing innovation. Tornado Cash provides an essential function (“mixer”) to enable private Ethereum transactions – an essential element for conducting business competitively.
Building privacy technologies is important, but we also need to understand the line between legal and illegal use cases. Yes, start the Silk Road, but don’t allow the sale of drugs there. Run Tornado Cash, but don’t encourage money laundering. The chilling effect that both cases have had on developers like me cannot be overstated. Privacy innovators in the United States and abroad are now questioning their work, fearing legal repercussions for creating privacy-protecting tools.
And what do you do when you launch something decentralized that takes on a life of its own? The sanctions against Tornado Cash were ruled illegal by the Fifth Circuit Court, but the Justice Department dismissed the ruling as irrelevant. The developers of Tornado Cash were reportedly aware of its misuse for money laundering purposes, but failed to act decisively to address it. On a decentralized platform, should its initial developers be responsible for user activity? There is a clear need for America to define a “Section 230” so that decentralized software developers are not criminally liable for what their users do on their platforms. (“Section 230” refers to a law freeing social media platforms from liability for content posted on their networks.)
Learn more:
As entrepreneur and politician Vivek Ramaswamy said: “You can’t go after code developers. What you really need to do is pursue individual bad actors who violate existing laws.
To progress as an industry, we must separate tools from their misuse. Privacy technologies such as Tornado Cash, Monero and Zcash are unfairly stigmatized due to their potential use for illicit purposes. But they hold transformative potential for legitimate use cases, from protecting personal financial data to securing commercial transactions.
Zcash, with its optional protected transactions, offers individuals and businesses the ability to transact securely and privately while remaining compliant with anti-money laundering (AML) and know-your-customer (KYC) regulations. Such innovations bridge the gap between cryptocurrencies and traditional industries, allowing businesses to adopt cryptocurrencies without exposing sensitive financial details.
Privacy technologies like Zcash also address a fundamental flaw of Bitcoin and other public cryptocurrencies: the exposure of transaction data that creates competitive disadvantages and privacy risks. Soon, Zcash will be on Mayachain, enabling a decentralized way to convert between Bitcoin and Zcash. It will also soon support ZSAs (protected assets), which will allow stablecoins to be issued privately for the first time.
The new administration has proposed a national “Bitcoin strategic reserve,” but that raises questions about privacy and decentralization. Unlike other reserves, like gold, Bitcoin’s blockchain forever discloses deposits and withdrawals to the public. 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 led to early adoption: a perception of privacy, financial freedom and, most importantly, peer-to-peer payments.
The US crypto landscape, currently plagued by regulatory uncertainty, scams and collapses, needs to be re-evaluated. Rather than demonizing privacy innovations, policymakers should work with developers to create clear and enforceable standards for the responsible use of “e-money.” This means proactive education and collaboration with regulators, more investment in privacy technologies, and the development of a regulatory framework that encourages blockchain innovation in the United States.
