Coin Center’s Peter Van Valkenburgh published a report exploring the potential Constitutional concerns should aggressive regulators attempt to crack down on the coders developing ideas for cryptocurrencies and decentralized exchanges.

For long-time readers of the EFF blog, some of these ideas will seem familiar. EFF has been asserting that publishing code for cryptocurrency is a form of protected speech since 2014, when we argued to the New York State Department of Financial Services that “government action triggers First Amendment protections when it regulates computer programs such as digital currency protocols—a fact that is especially true given the open source nature of these programs, which allows users to view, share, and develop ideas based upon the code itself.” We also sent a stern letter to the SEC in February over their action against a decentralized exchange, reminding them that writing and publishing code is a form of protected speech under the First Amendment, and that the courts don’t take kindly to government agencies requiring people to obtain licenses before exercising their free speech rights.

In the report, Van Valkenburgh examines potential regulatory backlash to the rise of privacy-enhancing blockchain tools, including privacy-protective cryptocurrency protocols and decentralized exchanges. As Van Valkenburgh notes in his report:

Faced with both (a) a decline in readily surveillable data on public blockchains and from BSA-regulated exchanges, and (b) the inability to constitutionally deputize new entities as BSA-obligated surveilors, regulators may seek to outlaw the publication of electronic cash or decentralized exchange source code, or permission its publication on inclusion of backdoors that surreptitiously collect and report information to the government. Source code, the language by which developers communicate scientific and engineering ideas to each other and the world, is protected speech as described in the First Amendment. The government cannot ban the publication of types of speech nor can it require a person to speak unless it can prove a compelling state interest that could not be achieved through any less restrictive policy. Indeed, laws that require content-based licensing of speech carry a strong presumption of unconstitutionality that must be rebutted by the government when challenged in court. Any attempt to ban the publication of electronic cash and decentralized exchange source code, or any attempt to compel developers to rewrite their source code according to government strictures, would thus likely be found unconstitutional under the First Amendment.

Van Valkenburgh takes the time to unpack a range of court rulings related to the Fourth Amendment and the Third Party Doctrine, computer code as a form of speech, and First Amendment limitations on the government’s ability to squelch or regulate speech. There’s also a deep dive into the technologies behind privacy-enhancing cryptocurrencies and decentralized exchanges. Read Coin Center’s report.

Note: I provided feedback on an early draft of this report.