SEC’s Crypto Advocate Says Blockchain Code Is Protected By The Constitution

bitcoinistPublished on 2026-06-05Last updated on 2026-06-05

Abstract

SEC Commissioner Hester Peirce argued that publishing open-source blockchain code is a protected activity under the First Amendment and developers should not be automatically liable as securities intermediaries for how others use their software. She emphasized that liability should fall on those who engage in unlawful conduct, not the tool creators. Her remarks reflect a broader regulatory shift at the SEC under Chair Paul Atkins, moving away from regulation by enforcement. The agency's Crypto Task Force is reviewing how existing securities laws, designed for traditional intermediaries, apply to decentralized systems. Recent SEC guidance also suggested some platforms accessing decentralized protocols may not qualify as traditional brokers. The SEC's strategic plan through 2030 indicates blockchain and crypto assets remain a long-term priority as potentially transformative technologies for financial infrastructure.

A federal securities regulator is drawing a line between writing blockchain code and being responsible for how that code gets used — and the distinction could reshape how the government treats software developers in the decentralized finance space.

Broader Regulatory Shift Behind The Remarks

Hester Peirce, a commissioner at the US Securities and Exchange Commission, made the case Tuesday at the IC3 Blockchain Camp at Princeton University that publishing open-source blockchain software is a protected activity under the First Amendment.

She argued that developers who release DeFi code should not be automatically classified as securities intermediaries just because other people use what they built.

Legal liability, she said, should fall on those who actually engage in unlawful conduct — not on the people who wrote the underlying tools.

Peirce’s remarks fit into a wider rethinking underway at the SEC since Chair Paul Atkins took the helm.

Source: SEC

The agency has been pulling back from what Atkins has described as regulation by enforcement, with its Crypto Task Force now reviewing how existing securities laws apply to digital assets and decentralized systems.

Peirce, a long-standing voice for clearer rules in the crypto space, has been central to that push.

Rules Built For A Different World

She pointed to the SEC’s rulebook as evidence of the problem. The agency’s regulations were designed around intermediaries — brokers, dealers, exchanges, clearinghouses, transfer agents, investment advisers, and investment companies.

Peirce questioned whether those same rules make sense when applied to distributed blockchain networks that exist for purposes well beyond securities transactions.

Her comments came weeks after SEC staff issued separate guidance addressing broker-dealer registration requirements for certain user interfaces.

BTCUSD now trading at $62,332. Chart: TradingView

That guidance indicated some front-end websites and software platforms that provide access to decentralized protocols may not qualify as brokers under the traditional legal definition — a signal that the agency is rethinking how far its existing categories can stretch.

Digital Assets As Long-Term Priority

The SEC has also signaled that crypto and blockchain technology will remain a focus for years ahead. In its draft Strategic Plan through fiscal 2030, the agency described blockchain and crypto assets as technologies with the potential to reshape America’s financial infrastructure.

Taken together, the staff guidance, the strategic plan, and Peirce’s speech at Princeton paint a picture of an agency trying to redraw boundaries that were never clearly set.

Featured image from Pixabay, chart from TradingView

Related Questions

QAccording to SEC Commissioner Hester Peirce, what activity related to blockchain software is protected under the First Amendment?

AHester Peirce stated that publishing open-source blockchain software is a protected activity under the First Amendment.

QWhat key distinction is Hester Peirce drawing regarding blockchain code developers and legal liability?

AShe is drawing a distinction between writing blockchain code and being responsible for how it is used, arguing that legal liability should fall on those who engage in unlawful conduct, not necessarily on the developers who created the underlying tools.

QWhat broader regulatory shift at the SEC does Peirce's speech fit into?

AHer remarks fit into a wider rethinking at the SEC, led by Chair Paul Atkins, which is moving away from regulation by enforcement. The agency's Crypto Task Force is reviewing how existing securities laws apply to digital assets and decentralized systems.

QWhat recent SEC guidance suggests the agency is rethinking the application of traditional broker-dealer rules?

ARecent SEC staff guidance indicated that some front-end websites and software platforms providing access to decentralized protocols may not qualify as brokers under the traditional legal definition.

QHow does the SEC's draft Strategic Plan through fiscal 2030 characterize blockchain and crypto assets?

AThe SEC's draft Strategic Plan described blockchain and crypto assets as technologies with the potential to reshape America's financial infrastructure, signaling they will remain a long-term priority.

Related Reads

The Value Distribution of Stablecoins

**Summary: The Value Distribution of Stablecoins** The article argues that stablecoins are evolving from mere trading tools into broader channels for dollar access. It divides the stablecoin ecosystem into four layers to analyze how value is distributed: 1. **Issuance Layer:** Mints stablecoins, holds reserve assets, and captures the spread between reserve yield and user costs (e.g., Tether, Circle). This layer currently earns the largest profit margin. 2. **Infrastructure Layer:** Connects stablecoins to the traditional financial system, handling fiat on/off-ramps, banking integration, compliance (KYC/AML), and asset management (e.g., Bridge, BVNK). This is the "unglamorous" but critical work, building the essential bridges between crypto and real-world finance. 3. **Acquiring/Distribution Layer:** Integrates stablecoins into merchant systems, manages payment flows, and provides enterprise financial software (e.g., Stripe, Coinbase). They act as the access point for businesses. 4. **Application Layer:** The end-users and businesses that ultimately use stablecoins for payments, settlements, or as a store of value. They benefit from convenience but have little pricing power. The core thesis is that while the issuance layer currently dominates profits, the often-overlooked **infrastructure layer holds significant long-term potential**. The real challenge and barrier to mass adoption is not the on-chain transfer of stablecoins (which is simple), but the complex "last mile" integration into existing business workflows, banking systems, and regulatory frameworks across different countries. Companies in this layer are currently in a "land grab" phase, investing heavily to build networks, secure bank partnerships, and establish compliance pathways. While their position is currently pressured by the profitable issuers above and distribution platforms below, the article suggests that if stablecoins become a default financial rail for businesses, the infrastructure providers who have done the hard work of integration will ultimately gain strong pricing power and become entrenched, essential players.

marsbit22m ago

The Value Distribution of Stablecoins

marsbit22m ago

The Value Distribution of Stablecoins

The Value Distribution of Stablecoins The article argues that stablecoins are evolving from a mere trading tool into a broad "dollar channel." It analyzes the industry's value chain through four layers: 1. **Issuance Layer (e.g., Tether, Circle):** The top layer that mints stablecoins, holds reserve assets, and captures the thickest interest rate spread. 2. **Infrastructure Layer (e.g., Bridge, BVNK):** Connects stablecoins to the traditional financial system, handling critical but complex "dirty work" like fiat on/off-ramps, banking integration, compliance (KYC/AML), and cross-border settlement. 3. **Acquiring/Distribution Layer (e.g., Stripe, Coinbase):** Embeds stablecoins into merchant systems, manages payment flows, and integrates with enterprise software. 4. **Application Layer:** End-users and businesses that ultimately use stablecoins for payments, settlement, or storing value. The author posits that while the issuance layer currently captures the most profit, the most overlooked and potentially critical layer is infrastructure. The core challenge for stablecoin adoption isn't the on-chain transfer (which is simple), but bridging the gap between blockchain and the real-world financial system. This involves solving practical problems for businesses: fiat conversion, reconciliation, tax handling, and user onboarding. Infrastructure companies are currently in a difficult "land-grab" phase—building networks, securing banking relationships, and achieving compliance country-by-country. They face pressure from both the profitable issuance layer above and distribution platforms below. However, the author suggests this layer is building a crucial moat. Once stablecoins become a default business rail, the infrastructure players who have done the hard work of integration may gain significant, durable value and pricing power.

链捕手26m ago

The Value Distribution of Stablecoins

链捕手26m ago

Why Is Nvidia Borrowing $20 Billion When It's Not Short of Cash?

Nvidia's recent announcement to issue at least $20 billion in senior notes, despite holding a strong cash position with over $48.6 billion in free cash flow last quarter, is not a sign of financial need. Instead, it represents a strategic move to leverage its high credit rating (recently upgraded to AA by S&P) to secure low-cost, long-term debt. This capital will support long-term AI infrastructure investments, data centers, R&D, supply chain prepayments, and strategic investments, while allowing the company to continue aggressive shareholder returns through stock buybacks and dividends. The decision reflects a mature capital management strategy: using debt to finance long-term growth assets is more efficient and less dilutive to shareholders than equity financing. It signals that Nvidia, like other tech giants (Alphabet, Meta, Amazon), is entering a new phase of heavy AI capital expenditure, shifting from a pure growth story to a story about capital allocation, credit strength, and long-term ecosystem positioning. The key question for investors is whether Nvidia can maintain its high cash flow generation and ensure that returns from these AI investments justify the cost of capital over the long term. The bond issuance amplifies its expansion capabilities but also ties its valuation more closely to the broader AI investment cycle's sustainability and profitability.

marsbit1h ago

Why Is Nvidia Borrowing $20 Billion When It's Not Short of Cash?

marsbit1h ago

Liberland Fires Tech Secretary After Alleged Blockchain And Website Takeover Attempt

Liberland's congress has voted to remove Technology Secretary Dorian Stern Vukotić, following a resolution accusing him of attempting to hijack the Liberland.org domain, removing administrative multisig protections, blocking the president from voting, and launching unauthorized tokens. The incident serves as a case study in blockchain governance, highlighting risks that go beyond smart contracts to include control over domains, admin keys, and off-chain authority. For the crypto industry, it underscores the need to scrutinize decentralization claims against operational realities, where a small group can still compromise governance. The story reflects a broader market shift where infrastructure security and governance are becoming as critical as price action. Editorial framing should treat the development as a verified information signal about governance risks, avoiding overstatement of Liberland's legal status and leaving room for follow-up evidence.

bitcoinist1h ago

Liberland Fires Tech Secretary After Alleged Blockchain And Website Takeover Attempt

bitcoinist1h ago

How to Do Research Well: Deliberately Practice the Real Skills That Matter

No one truly teaches you how to do research. You're often given a desk, a pre-selected problem, and vague instructions to "create something new." Consequently, many people reverse-engineer the job based on visible outputs—papers, posts, announcements—learning only how to *appear* like a researcher rather than how to *become* one. True research capability is built from stacking small, trainable skills, nearly all of which can be developed through deliberate practice. **Pick Your Own Problem:** Most researchers absorb problems from advisors or trends, lacking the underlying reasoning. Choosing a problem you genuinely care about, as John Schulman advises, leads to original work. Develop "taste" like a muscle: predict experiment outcomes, guess paper results from methods, and track which findings remain important over time. **Upgrade Your Inputs:** Relying on shared reading lists (arXiv hot lists, filtered group chats) leads to unoriginal conclusions. Undervalued old literature often holds crucial insights (e.g., MoE, LSTM, backpropagation). Richard Sutton's "The Bitter Lesson" or Claude Shannon's 1952 talk on creative thinking are more predictive than lengthy modern surveys. Breadth matters as much as depth: draw from neuroscience, mechanism design, hardware knowledge, and honest statistics. Read papers directly, especially appendices and limitations sections. **Write Everything Down:** As Paul Graham noted, writing exposes flaws in seemingly mature ideas. Writing is the cheapest defense against self-deception. Following Feynman's principle, Darwin programmatically wrote down facts contradicting his theory to combat memory bias. Maintain a detailed log of hypotheses, setups, predictions, results, and updated understandings. Reviewing past logs fosters essential humility.

marsbit2h ago

How to Do Research Well: Deliberately Practice the Real Skills That Matter

marsbit2h ago

Trading

Spot
Futures
活动图片

Hot Categoriesright-arrow

Hot Tagsright-arrow