While at the Bitcoin Conference in Las Vegas, executives from US federal agencies promise not to prosecute developers, in reality code is in the dock.
Keonne Rodriguez has entered a US federal penitentiary. Five years. His crime: writing a non-custodial Bitcoin wallet with Whirlpool.
He never touched user funds. He didn't hold the keys. The code was open source. Yet the Department of Justice prosecuted him for "unlicensed money transmitting" under Section 1960 - a charge that requires no proof of intent, no complicity with crimes, no custody of others' funds. His associate William Lonergan Hill got four years.
Running parallel is Roman Storm, co-founder of Tornado Cash - a non-custodial mixer on Ethereum. Arrested in August 2023. A four-week trial in the Southern District of New York. Verdict on August 6, 2025: the jury failed to reach agreement on the two heavy counts (money laundering, violating North Korea sanctions), but convicted him on § 1960. Same charge, same pattern. If the motion for acquittal filed by the defense is denied, Storm faces a retrial in October 2026 with total exposure approaching forty-five years.
Too bad that back in 2019 FinCEN had explicitly written: anyone who develops non-custodial peer-to-peer software without controlling user funds is not a money transmitter. In April 2025, Deputy Attorney General Todd Blanche issued an internal memo: stop regulatory prosecutions against developers of non-custodial software.
The verdict against Storm came in August 2025. Four months after the Blanche memo. Prosecutors in the Southern District of New York pushed for conviction anyway. In March 2026 they sought a new trial on the other two counts, with the opposite directive written in black and white by DOJ leadership.
If the interpretation of § 1960 applied to Storm holds up on appeal, the perimeter is this: any American developer of wallets, coinjoins, or Lightning Service Providers becomes a potential defendant. The menu is already written. Plead and take four or five years. Fight and risk forty-five.
Code is on trial, whatever the paid feds in Las Vegas may say.
naddr1qqsk...
Keonne Rodriguez has entered a US federal penitentiary. Five years. His crime: writing a non-custodial Bitcoin wallet with Whirlpool.
He never touched user funds. He didn't hold the keys. The code was open source. Yet the Department of Justice prosecuted him for "unlicensed money transmitting" under Section 1960 - a charge that requires no proof of intent, no complicity with crimes, no custody of others' funds. His associate William Lonergan Hill got four years.
Running parallel is Roman Storm, co-founder of Tornado Cash - a non-custodial mixer on Ethereum. Arrested in August 2023. A four-week trial in the Southern District of New York. Verdict on August 6, 2025: the jury failed to reach agreement on the two heavy counts (money laundering, violating North Korea sanctions), but convicted him on § 1960. Same charge, same pattern. If the motion for acquittal filed by the defense is denied, Storm faces a retrial in October 2026 with total exposure approaching forty-five years.
Too bad that back in 2019 FinCEN had explicitly written: anyone who develops non-custodial peer-to-peer software without controlling user funds is not a money transmitter. In April 2025, Deputy Attorney General Todd Blanche issued an internal memo: stop regulatory prosecutions against developers of non-custodial software.
The verdict against Storm came in August 2025. Four months after the Blanche memo. Prosecutors in the Southern District of New York pushed for conviction anyway. In March 2026 they sought a new trial on the other two counts, with the opposite directive written in black and white by DOJ leadership.
If the interpretation of § 1960 applied to Storm holds up on appeal, the perimeter is this: any American developer of wallets, coinjoins, or Lightning Service Providers becomes a potential defendant. The menu is already written. Plead and take four or five years. Fight and risk forty-five.
Code is on trial, whatever the paid feds in Las Vegas may say.
naddr1qqsk...
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