The Samourai Wallet matter raises a fundamental question about how the United States treats non-custodial software and the developers who create it. Keonne Rodriguez and William Lonergan Hill did not operate a financial service or handle customer assets. They wrote and maintained software that allowed users to construct collaborative Bitcoin transactions in a privacy-preserving way. Throughout the tool’s entire lifecycle, users controlled their own keys, initiated their own transactions, and never relied on Samourai or its developers to transmit or safeguard value. The distinction between a custodial service and a non-custodial tool is not a technicality; it is the core boundary that the Bank Secrecy Act, FinCEN guidance, and decades of regulatory practice use to distinguish software authors from regulated financial intermediaries.

This point was reinforced by FinCEN itself. In an internal analysis, the agency concluded that Samourai’s architecture did not constitute money transmission because no third party took possession or control of user funds. That conclusion was never disclosed to the defense while the prosecution advanced a theory that required the opposite: that building software which users employ for privacy is functionally equivalent to operating a financial institution. When that analysis finally surfaced, it confirmed what has long been understood across the industry and within the regulatory community—that non-custodial tools fall outside the BSA’s money-transmitter framework because there is no transfer of value by a third party. The case ultimately treated the developers as if they were responsible for the independent actions of users, even though they had no role in executing, intermediating, or approving any transaction. Some individuals did misuse the tool, as happens with any privacy or security technology, but the law has never equated misuse with liability for the creators. We do not treat the authors of encryption libraries, VPN protocols, or email clients as participants in unlawful activity simply because bad actors rely on those tools. Collapsing the distinction between developing a tool and operating a service would introduce an untenable level of risk for anyone building privacy-enhancing or security-critical software.

There is also an important speech component. Courts have consistently recognized that code is expressive, and publishing open-source software is an act of communication. When publication is treated as evidence of “operation,” the legal boundary between authorship and conduct becomes blurred in a way that threatens a wide range of legitimate technologies. Any precedent suggesting that developers are responsible for unforeseeable downstream use would have immediate consequences for cryptography, cybersecurity research, and open-source work more broadly.

Rodriguez and Hill ultimately accepted plea agreements in the face of substantial sentencing exposure, even though government records undermined the central regulatory theory of the case. Their convictions now rest on a framework that is at odds with established guidance and with the direction in which federal policy has since moved. A pardon would bring the legal outcome back into alignment with the underlying facts: this was software development, not money transmission, and the individuals involved should not bear criminal liability for writing code that users executed independently.

This case has already had a measurable chilling effect on developers working on privacy and security tools in the United States. Leaving the convictions in place would discourage responsible innovation and push critical work to jurisdictions that do not share our commitment to open research and transparent development. A pardon would correct a clear misapplication of federal law, protect the integrity of long-standing distinctions in financial regulation, and reaffirm that publishing non-custodial software is not—and should not become—a criminal act.

Disclaimer – This is a guest contribution by Zack Shapiro, originally published by the Bitcoin Policy Institute (BPI). The views and opinions expressed are solely those of the author and do not necessarily reflect the views of BTC Inc or Bitcoin Magazine.

This post Pardoning the Samourai Developers Would Restore Legal Clarity and Protect Non-Custodial Code first appeared on Bitcoin Magazine and is written by Zack Shapiro.

In a 2-1 decision issued today, the Tenth Circuit affirmed the denial of a Federal Reserve master account to Custodia Bank, the Wyoming-chartered Special Purpose Depository Institution (SPDI) that has become the test case for crypto-native banking. The panel upheld the district court across the board and left Reserve Banks with broad (and potentially unreviewable, in the words of the dissent) discretion over access.

Master accounts are the keys to the fiat kingdom. They’re the ledger entries that let institutions clear and settle directly at the Fed; without one, a “bank” is functionally just a vault dependent on fickle intermediaries and third-party rails. That practical choke point (which has been abused by regulators before) gives any discretion over access extraordinary policy significance.

Wyoming created SPDIs to pair traditional (but fully reserved) dollar banking rails with segregated digital-asset services. Custodia, barred from making loans and required to keep dollar deposits 100% backed by high-quality liquid assets, applied for a master account in October 2020. Early signals from the Kansas City Fed were positive (“no showstoppers”), but after the Board finalized its 2022 access Guidelines, FRBKC treated Custodia as a Tier 3 applicant, the bucket that “generally receive[s] the strictest level of review,” and formally denied the account in January 2023. The Board, consulted beforehand, emailed it had “no concerns” with FRBKC communicating a denial.

The Majority Opinion

Writing for the court, Judge Ebel rejected Custodia’s statutory and administrative claims, and essentially granted the Federal Reserve broad, and potentially unbounded, discretion on this point. Reading the Federal Reserve Act’s § 342 (“may receive deposits”) together with the Monetary Control Act’s § 248a, the panel concluded that access decisions remain discretionary with the Reserve Banks; § 248a(c)(2)’s “shall be available” language concerns pricing and parity for services the Board prices, it doesn’t force the Banks to open an account for every eligible institution. The court also treated the 2022 “Toomey Amendment” (§ 248c) as transparency-oriented, not a mandate to approve applications.

On the APA front, the panel held the Board’s “no-concerns” email was not final agency action, the ultimate decision belonged to FRBKC under the Guidelines, so it carried no independent legal effect. That also undercut theories aimed at the Board itself. Finally, Judge Ebel dispenses with Custodia’s constitutional argument related to the Presidential appointment of inferior officers on a (in my opinion) flimsy technicality: that the argument was not properly preserved.

The Dissent 

Judge Tymkovich dissented, reading § 248a(c)(2)’s “shall be available” as a substantive access guarantee, not mere pricing boilerplate. In his view, when Congress opened the Fed’s services to “nonmember depository institutions,” it made master-account access a duty enforceable, if necessary, through traditional tools like mandamus, rather than a roving veto lodged in unappointed Reserve Bank officers (a framework he warns invites constitutional headaches). He also emphasized that courts in related master-account litigation (e.g., Banco San Juan) recognize the centrality of § 342 but do not resolve away the MCA’s “shall” command.

We are bound by the ordinary language of the statute and, in my view, shall means shall. Section § 248a(c)(2) mandates access to the Fed’s payment services for all nonmember depository institutions. By denying Custodia a master account, the Kansas City Fed has unlawfully denied it access to those services which are vital to its business. That, it cannot do.

The Road Ahead

We need to see the result in PayServices (Ninth Circuit). If that court goes the other way, a circuit split would materially increase the odds of Supreme Court review. It’s interesting to note that Judge Tymkovich was also on that case. But, for now, the ball is firmly in Custodia’s court.  

Today’s ruling cements Reserve Bank discretion at the access gate; the dissent, by contrast, reads the MCA as Congress’s promise of open access for state-chartered, deposit-taking institutions like Custodia’s SPDI. The stakes, for constitutional structure, state innovation, and Bitcoin-adjacent banking, couldn’t be clearer.

Disclosure: I authored an amicus brief on behalf of Wyoming’s Secretary of State supporting Custodia.

This is a guest post by Colin Crossman. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

This post Tenth Circuit Hands Fed a Win: Custodia Denied Master Account in Blow to Crypto Sovereignty,  Dissent Brings the Heat first appeared on Bitcoin Magazine and is written by Colin Crossman.

Kenya has passed a Virtual Asset Service Providers (VASP) law that fundamentally reshapes the regulatory landscape for digital assets in the country.

In plain English: it doesn’t regulate Bitcoin the protocol or your private self-custody. Instead, it regulates companies that touch customer assets — exchanges, custodians, token issuers, investment advisors, brokers, and trading platforms.

The law creates a licensing perimeter around commercial intermediaries and gives regulators enforcement teeth over that perimeter. Think of it as drawing a regulatory fence around businesses that handle other people’s bitcoin and crypto, whilst leaving individual users and peer-to-peer (P2P) transactions outside the gate.

This distinction is critical: the Act targets virtual asset services, not the underlying technology or private ownership. If you’re holding your own keys and transacting directly with another person, you’re outside the licensing regime. But the moment you start offering custody, brokerage, advisory, or platform services to the public, you’re inside the perimeter — and you need a license.

Key takeaway: The VASP Act concerns commercial intermediaries, not individual users. Self-custody and P2P transactions remain unregulated, but businesses touching customer assets face full licensing requirements.

What Parts of “Crypto” the Law Does Regulate: The Licensing Perimeter

Licensed VASPs are any Kenya-registered (or compliant foreign) companies that perform the activities listed in the Schedule to the Act. These activities map to specific regulators — primarily the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA) — and trigger comprehensive compliance obligations.

Exchanges & Trading Platforms: Brokers, trading platforms, and services facilitating fiat-to-VA or VA-to-VA exchanges. Both centralized and certain decentralized platforms that hold custody or market-make against clients fall within scope.

Custody & Wallet Providers: Any service holding client coins on their behalf. If you control the keys to customer assets, you’re a custodian and need licensing, capital adequacy, segregation, and audit requirements.

Investment Advisors & Managers: Providing advice or discretionary management of virtual asset portfolios for clients. This captures both retail advisory and institutional asset management services.

Token Issuance & Tokenization: Initial virtual asset offerings (ICOs/STOs) and real-world asset (RWA) tokenization. These fall primarily under CMA oversight as they intersect with securities and capital-markets regulation.

Escrow & Platform Operators: Services providing escrow functions for virtual asset transactions and certain platform operators facilitating multi-party trades or settlements.

Each activity triggers specific obligations: licenses, capital and solvency requirements, fit-and-proper assessments, AML/CFT/CPF controls, conduct standards, cybersecurity measures, advertising rules, periodic audits, and ongoing reporting. The breadth is deliberate — regulators want bank-grade compliance from anyone touching customer assets.

Key Definitions for Terms in the Act

Virtual asset: A digital representation of value that can be traded, transferred, or used for payment or investment purposes. Explicitly excludes fiat currency, e-money, and securities (which have their own regulatory regimes).

Virtual Asset Trading Platform: A centralized or decentralized platform that facilitates exchange and either (i) holds custody of client assets, or (ii) market-makes against clients. Both limbs trigger licensing.

Virtual Service Token: Pure utility tokens that are non-transferable and used solely within a closed ecosystem. These fall outside the licensing perimeter — a narrow carve-out for genuine utility.

These definitions matter because they set the boundaries of regulatory jurisdiction. The Act uses functional language (“digital representation of value”) rather than technology-specific terms, meaning it’s designed to be technology-neutral and capture future innovations. However, this breadth also creates interpretive grey areas — expect subsidiary regulations and guidance to clarify edge cases.

Who’s in Charge? Dual Regulators and Subsidiary Powers

Central Bank of Kenya (CBK) + Capital Markets Authority (CMA)

These are the joint lead regulators for VASPs, with activity-based allocation. CBK typically oversees payments, custody, and exchange functions; CMA handles token offerings, investment advice, and tokenized securities. The Cabinet Secretary for National Treasury can designate additional regulators by Gazette notice — so watch for future expansions of the regulatory perimeter.

Subsidiary Regulations (The Real Power)

The Treasury CS has broad discretion to issue subsidiary regulations that flesh out critical details: stablecoin frameworks, tokenization standards, capital adequacy ratios, solvency tests, insurance requirements, conduct rules, advertising standards, cybersecurity mandates, and more.

Expect a lot of the actual policy to be decided here — the Act is a framework; the regs will be the teeth.

Practical implication: The act is deliberately high-level. Founders and compliance teams should track the gazetting of subsidiary regulations closely — those will determine capital thresholds, operational standards, and day-to-day compliance burdens. Early engagement with regulators during consultation periods is advisable if you’re planning a VASP business.

What the Law Doesn’t Regulate

Outside the licensed perimeter, the Act does not (on its face) outlaw or require licensing for:

• Owning Bitcoin in self-custody (your own keys, your own wallet) — this is private property, not a regulated service.
• Paying another person directly wallet-to-wallet (peer-to-peer) — private contractual settlement between two parties remains outside the scope.
• Running a non-custodial wallet app where users hold their own keys and you provide only software (absent other regulated activities like brokerage or custody).

The Act explicitly applies to “virtual asset services” (the Schedule list) offered in Kenya; it is not a general ban or license requirement on private use of bitcoin or other virtual assets.

That said, unlicensed businesses offering any Schedule activity can face enforcement, fines, and criminal penalties. The line between “private use” and “carrying on a business” will be tested in practice — habitually dealing for the public, even informally, could morph you into an unlicensed broker.

Pros & Cons (Gloves Off)

Potential Pros

Legal Clarity for Institutions: Pensions, banks, fintechs, and corporates now have a rulebook to engage with digital assets. Licensed on-ramps and custodians with proper compliance make institutional adoption feasible.

Consumer Safeguards: Fit-and-proper tests, capital adequacy, audits, asset segregation, cybersecurity standards, and conduct rules reduce “cowboy operator” risk. Retail users benefit from recourse mechanisms and dispute resolution.

Tax Clean-Up: The punitive 3% Digital Asset Tax on transaction value was repealed by Finance Act 2025. Kenya now pivots to excise duty on VASP fees — much friendlier for savers and long-term holders. Tax targets platforms’ charges, not the full notional trade value.

Pathway for Tokenization & RWAs: Clear CMA oversight for tokenized securities and real-world assets unlocks capital-markets pilots and enterprise use cases (land registries, trade finance, supply-chain tokenization).

Real Cons

Gatekeeping via Licenses: Dual regulators plus high capital, insurance, and AML burdens can lock out SMEs and open-source teams. Big banks and fintechs win by default; innovation may be stifled by compliance costs.

Subsidiary-Rules Risk: Broad discretion given to the Treasury CS can tighten rules on stablecoins, self-hosted wallet interfaces, P2P marketplaces, or Lightning gateways later. Policy can “narrow the pipe” after headlines fade and public attention wanes.

Surveillance Creep: Strict know-your-customer (KYC) laws and record-keeping across VASPs, plus mandatory data-sharing with AML bodies, raises privacy risks for ordinary users who rely on custodial rails. Expect financial surveillance to intensify.

Category Error: Bitcoin ≠ generic “virtual asset.” Lumping bearer digital cash with issuer-based tokens invites over-regulation of money as though it were a security or product. The Act doesn’t correct that fundamental conceptual flaw.

From a Bitcoin Lens: Acquiring, Saving & Spending

Acquiring BTC

Via VASPs (exchanges/brokers): Expect full KYC, fee-based excise duty, AML transaction monitoring, withdrawal policies, and proof-of-funds queries. Institutional-grade on-ramps should improve in quality and reliability — but at the cost of privacy and friction.

Peer-to-peer: Private purchases and sales between individuals remain outside the licensing perimeter, as long as you’re not carrying on a Schedule business. Be careful not to morph into an unlicensed broker or exchange by habitually dealing for the public (e.g., running a Telegram group offering regular buy/sell services).

Practical upshot: Retail users can still dollar-cost-average non-custodially via P2P or occasional licensed platform buys; businesses wanting routinized, high-volume flows will likely use licensed platforms to manage compliance and audit trails.

Saving in BTC (Self-Custody)

Keeping Bitcoin on your own wallet (hardware or software where you control the keys) is not prohibited by the Act. This is private property, akin to holding gold or foreign currency at home.

Corporate treasuries: Companies can hold BTC on balance sheet, but must follow IFRS accounting standards (usually classified as intangible asset at cost with impairment testing; or inventory if you’re a market-maker). Create a board-approved treasury policy covering allocation limits, custody arrangements, key management, and audit trails. Kenya applies IFRS; the IFRS Interpretations Committee 2019 guidance (IAS 38 treatment) is the usual reference.

Spending / Paying in BTC

Direct wallet-to-wallet payments between two parties (e.g., paying a supplier, settling an invoice, tipping a creator) are not regulated as a VASP activity. Freedom of contract applies; the state can tax income or gains, but doesn’t pre-approve the medium of settlement.

If you provide a payment service that sits in the flow of customer funds — custody, routing, conversion, settlement facilitation — you’re likely a VASP-type business and need licensing. Lightning gateways that take custody or provide fiat conversion will fall within scope; pure routing nodes operated by users themselves likely won’t.

Constitution, Tax & Company Compliance — Outside the VASP Fence

Constitutional Stakes

Property & Privacy: Self-custodied keys are a form of digital property and personal data. Any future subsidiary regulation that compels key disclosure or bulk monitoring must pass constitutional tests under Kenya’s 2010 Constitution: necessity, proportionality, and respect for fundamental rights (Articles 31, 40). The VASP Act doesn’t override these rights — it creates a licensing regime for intermediaries, not a surveillance charter for private wallets.

Freedom of Contract & Association: Two people agreeing to settle an obligation in Bitcoin exercise freedom of contract (Article 36). The state can tax the income or gains, but needn’t pre-approve the medium so long as no other law (e.g., money-laundering statutes) is violated. The VASP Act doesn’t prohibit private contractual settlement in virtual assets.

Tax (Post-Finance Act 2025)

No More 3% DAT

The punitive Digital Asset Tax on transaction value is repealed. Instead, Kenya now levies excise duty on VASP fees (the platform’s charge for service). This doesn’t tax peer-to-peer notional flows directly; it taxes the intermediary’s commission.

Income / Capital Gains

Individuals: Kenya taxes income; gains may be taxable if you’re trading as a business or receive BTC for services rendered. Passive long-term appreciation without a realization event isn’t typically taxed until disposal — but document your cost basis (date acquired, cost in Kenyan shillings (KES), transaction ID (txid)).

Companies: Realized gains/losses hit profit & loss under IFRS; taxable under corporate income tax when realized. If BTC is held as inventory (e.g., market-making), trading profits are ordinary income. If held as intangible asset, impairment losses are deductible but unrealized appreciation isn’t taxed until sale.

VAT

Generally no VAT on money or money-like instruments; but VASPs’ service fees can attract VAT or excise depending on classification. Confirm with your tax advisor once subsidiary regulations land. Excise on VASP fees is already indicated in Finance Act 2025.

Accounting & Audit (IFRS)

Classification: Most corporate treasuries treat Bitcoin as an intangible asset (IAS 38). Market-makers and traders may classify as inventory (IAS 2).

Measurement: Intangibles are typically carried at cost less impairment (no upward revaluation through P&L until disposal), which can significantly understate economic value on the balance sheet. Pair this with management metrics in notes: BTC units held, fair-value footnotes, value-at-risk (VaR) disclosures.

Controls: Dual-control of private keys, SOC-audited custody providers (if using external custody), board-approved treasury policies, segregation between treasury holdings vs operational float, and regular reconciliation of on-chain balances.

Company Law & General Compliance

If you offer any Schedule VASP activity (brokerage, custody, platform, advice, token issuance), you must: incorporate appropriately, apply to the relevant regulator(s), meet capital and solvency requirements, pass fit-and-proper assessments, implement AML/KYC/CFT controls, comply with cybersecurity and conduct standards, adhere to advertising rules, file periodic reports, and undergo audits.

If you only hold BTC on your balance sheet, pay suppliers in BTC by mutual agreement, or accept BTC as settlement (converted immediately or held) without acting as a custodian or exchange for the public, you’re not a VASP — standard Companies Act and tax rules apply, but no VASP license is required.

Actionable Playbooks: What You Should Do Now

For Ordinary Kenyans

Learn self-custody: Choose a reputable non-custodial wallet (hardware or mobile), back up your seed phrase properly (offline, multiple secure locations), and practice small sends to familiarize yourself with the process.

DCA with exits: Use licensed on-ramps for KES-to-BTC conversions when convenient, but immediately withdraw to your own wallet. Keep detailed records: date, KES cost basis, txid, and wallet address.

Peer-to-peer payments: You can pay or receive BTC directly wallet-to-wallet. If it’s income (e.g., freelance work), declare it for tax. If you dispose of BTC at a gain, track your cost basis to calculate taxable gain accurately.

For SMEs / Corporates

Board-approved BTC Treasury Policy: Document allocation limits (e.g., % of reserves), risk management (volatility, custody, counterparty), key management procedures (multi-sig, hardware security modules), and accounting treatment (IFRS classification, impairment testing).

Non-custodial acceptance: Accept BTC from customers directly into your own wallet, or via a payment processor that settles instantly to you in BTC or KES (minimising custodial exposure and regulatory risk).

Avoid “accidental VASP” risk: Don’t hold client BTC, don’t broker or exchange for the

public, don’t run a trading platform—unless you affirmatively intend to obtain a VASP license and bear the compliance costs.

Tax & audit ready: Maintain ledgers of BTC units held, adopt a consistent cost-basis method (FIFO, LIFO, or specific identification), and record KES functional-currency conversions at transaction dates for P&L and tax purposes.

For Builders & Founders

Decide your regulatory posture: Non-custodial software (safer, outside licensing perimeter) vs custodial/market-facing VASP (licensing roadmap, capital requirements, ongoing audits, and compliance overhead).

Design for self-custody first: Prioritize user control of keys, composability with Lightning and other open protocols, and clean data trails users can export for tax reporting and auditability.

Engage regulators early: If pursuing a VASP license, begin dialogue with CBK/CMA during the application drafting phase. Understand their expectations on capital, systems, AML controls, and governance before you’re too far down the build path.

Stay agile on subsidiary regs: Monitor Gazette notices and public consultations — subsidiary regulations will define day-to-day compliance burdens, stablecoin rules, and emerging areas like Lightning or DeFi interfaces.

Bottom Line: What This Really Means

This law licenses intermediaries; it does not outlaw Bitcoin self-custody or peer-to-peer use.

The VASP Act will make bank-grade, compliant on-ramps more available — institutional capital can now flow into licensed custodians and exchanges with regulatory certainty. That’s a win for legitimacy, consumer protection, and formalizing the industry.

But it also centralizes power in licensed platforms, with all the usual trade-offs: higher fees, mandatory KYC, financial surveillance, slower iteration due to compliance overhead, and a bias towards incumbents (banks, large fintechs) who can afford the capital and legal costs. Smaller, open-source teams and peer-to-peer marketplaces face an uphill battle.

For Citizens & SMEs

The winning strategy is simple: learn self-custody, document your flows meticulously (dates, amounts,cost basis, txids), and don’t become a VASP by accident. Keep your Bitcoin on your own keys, transact peer-to-peer where possible, and use licensed platforms only when necessary for fiat conversion or institutional compliance.

For Builders Choosing the VASP Route

Assume bank-like compliance from day one: capital adequacy, fit-and-proper directors, AML/KYC systems (transaction monitoring, sanctions screening, suspicious-activity reporting), cybersecurity frameworks (ISO 27001, penetration testing), segregated client assets, external audits, and ongoing regulatory reporting. Budget for legal and compliance personnel; this isn’t a lean startup play.

The VASP Act is a double-edged sword: it legitimizes the industry and invites institutional participation, but it also imposes gatekeeping and surveillance that can undermine the open, permissionless ethos of Bitcoin. Your move depends on your goals — freedom and sovereignty, or legitimacy and institutional access.

Sources & Further Reading

Official Bill Text

Virtual Asset Service Providers Act (Kenya): Definitions (Part II), scope of application (Part III), Schedule of regulated activities, regulator mapping (CBK/CMA allocation), licensing framework, capital and solvency requirements, fit-and-proper standards, AML/CFT/CPF obligations, conduct and advertising rules, and enforcement provisions.

Finance Act 2025 (Tax Changes)

Repeal of the 3% Digital Asset Tax on transaction value; introduction of excise duty on VASP service fees. Confirms shift from taxing notional trade value to taxing intermediary charges — much friendlier for long-term holders and peer-to-peer users.

Passage & Dual-Regulator Design

Reuters, Parliament of Kenya official records, and press coverage of the Bill’s passage and pending/reported presidential assent. Commentary on the CBK/CMA co-ordination mechanism and the Cabinet Secretary’s subsidiary regulation powers.

IFRS Accounting Guidance

IFRS Interpretations Committee (2019) guidance on holdings of cryptocurrencies: IAS 38 (intangible assets) treatment, cost-less-impairment model, disclosure requirements. Kenya applies IFRS for corporate financial reporting; this is the authoritative reference for balance-sheet classification of Bitcoin and other virtual assets.

Constitutional Framework

Constitution of Kenya 2010: Articles 31 (privacy), 36 (freedom of association), 40 (property rights), and 47 (fair administrative action). These provisions anchor individual rights against over-reach in subsidiary regulations (e.g., compelled key disclosure, bulk surveillance without judicial oversight).

This guide is for informational purposes and does not constitute legal, tax, or financial advice. Consult a qualified Kenyan lawyer, tax advisor, or accountant for your specific circumstances. Law and regulations evolve; verify current status before acting.

This post Kenya’s New VASP Law: A No-BS Legal Guide for Bitcoin and Crypto Builders first appeared on Bitcoin Magazine and is written by Robert Kirubi.

A new House bill aims to lock in President Donald Trump’s August executive order directing the Labor Department to open retirement plans to alternative assets — including bitcoin.

The Retirement Investment Choice Act, expected to be introduced Tuesday by Rep. Troy Downing (R-Mont.), would give Executive Order 14330 “the force and effect of law.” 

The one-page bill cements Trump’s directive that Americans saving for retirement should be allowed access to crypto and other alternative assets if plan providers deem them appropriate.

“Alternative investments hold the transformative potential to supercharge the financial security of countless Americans saving for retirement,” Downing said in a statement reported by Politico. “I applaud President Trump for his leadership to democratize finance and am proud to be leading the effort in Congress to codify his EO.”

If enacted, it would permanently authorize 401(k) providers to include crypto-exposed products alongside traditional funds. This could unlock billions of dollars in new flows to Bitcoin and other digital assets.

Trump’s bitcoin-related executive order 

The executive order, signed in August, directed the Labor Department (DOL) and Securities and Exchange Commission (SEC) to expand access to “alternative assets” such as private equity, commodities, insurance products — and crypto. 

It gave the DOL 180 days to propose rules. That deadline falls in early February, though the recent government shutdown and staffing cuts at the Employee Benefit Security Administration could delay progress.

Senate Republicans urged the DOL in August to move quickly, calling for a “regulatory safe harbor” to protect plan sponsors that offer such investments. “Doing so will maximize the order’s effectiveness,” they wrote, “and ensure industry has the certainty needed to deliver on behalf of American retirees.”

Industry groups largely welcomed the shift. “Professional retirement plan fiduciaries — not the federal government — are in the best position to assess what is in the financial best interest of participants,” said Brian Graff, CEO of the American Retirement Association.

Still, the bill’s fate remains uncertain. Democrats are unlikely to support legislation seen as expanding crypto access in retirement accounts. And no Senate version has been introduced.

Even so, for a party increasingly embracing Bitcoin as a symbol of financial sovereignty, Downing’s proposal signals intent. Some lawmakers clearly want Bitcoin to be part of America’s retirement future.

Back in March, President Trump signed an Executive Order creating a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile to centralize government-held crypto. The Reserve, including the $14 billion in seized bitcoin at the time, would be held as a store of value and not sold.

This post New GOP Bill Wants to Solidify Trump’s Bitcoin-Friendly 401(k) Order first appeared on Bitcoin Magazine and is written by Micah Zimmerman.

Today, in a media scrum after his opening remarks at the SEC-CFTC Roundtable on Regulatory Harmonization Efforts, U.S. Securities and Exchange Commission (SEC) chairman Paul Atkins expressed his excitement in regard to bringing tokenized securities on-chain, though he didn’t offer any insight into what platforms or protocols these assets might trade on.

The latter may be particularly important to Bitcoin enthusiasts, because the wallets that you use to trade tokenized securities on-chain will likely require identifying information, and such a rule could spill over to bitcoin wallets.

So, I asked the chairman what securities coming on-chain looked like to him: Would it look like gated platforms like Fidelity and Charles Schwab employing blockchain to settle transactions on the back end or would it look more like tokenized stocks trading on decentralized exchanges?

He did not respond to my questions directly.

He instead first shared how securities trading on blockchains can reduce settlement time.

“The great thing about tokens [is that] you can have payment and exchange of the actual asset online at the same time — it’s T zero, basically instantaneous clearance,” Chairman Atkins told me.

And he followed up this statement with some mildly concerning language.

“So, maybe we’ll have to even build in like a speed bump to make sure that we don’t have any mistakes or wire money to the wrong place,” the chairman added. “We will be working realistically for the next year or two to try to get where we have good guardrails around the system.”

Words like “speed bump” and “guardrails” triggered alarm bells, as they indicate some form of control, and where there’s control, there’s often KYC.

If tokenized securities end up trading within the walled gardens of traditional brokerages, then the issue of KYC isn’t so concerning, as these platforms already KYC their customers.

The issue becomes more critical if tokenized securities can be traded through protocols like Uniswap via wallets like MetaMask and Trust Wallet, which would then likely be required to KYC their users.

If this happens, it begs the following questions: Will this lead to all crypto wallets having to KYC their users? Will this rule eventually bleed over to bitcoin-only wallets?

Based on my interaction with the chairman, I got the impression that he doesn’t currently have the answers to these questions. That is, he wasn’t being evasive as much as he genuinely didn’t seem to know exactly what the broader picture around tokenized securities looks like right now, as he’s waiting for Congress to act.

Much regarding crypto market regulation hangs in the balance as the Senate discusses and revises the CLARITY Act (CLARITY), the digital asset market structure bill. The chairman stated that he’s paying attention to CLARITY as it works its way through the legislative process.

“There’s the market structure act that cleared the House and is now [being discussed] in the Senate,” he told me. “We’ll see what happens.”

Bitcoin Magazine will follow up with Chairman Atkins on this issue when and if CLARITY passes.

In the meantime, if you want to protect your right to use you bitcoin wallet privately and permissionlessly, be sure to contact your elected officials as part of the Satoshi Needs You campaign.

This post SEC Crypto Policy: Chairman Atkins Vague on Wallet Rules first appeared on Bitcoin Magazine and is written by Frank Corva.

On Friday, the U.S. Senate Banking Committee released its latest draft of the CLARITY Act (CLARITY), in which it proposes an amendment to 18 U.S. Code § 1960(a) stipulates that only crypto developers or providers that “knowingly exercise control over currency, funds, or other value that substitutes for currency” be treated as money transmitting businesses.

What is more, this amendment would not only protect Bitcoin and crypto developers in the wake of a bill with this language included in its passing, but it would also protect said developers retroactively.

In Section 501 of section Title V of the draft, entitled “Protecting Software Developers and Software Innovation,” it states that “This section, and the amendments made by this section, shall apply to conduct occurring before, on, or after the date of enactment of this Act.”

A Positive Development for Tornado Cash Developer Roman Storm

If this language is included in a version of the bill that is enacted into law, Tornado Cash developer Roman Storm, who was found guilty of operating an unlicensed money transmitting business last month, stands to benefit.

Storm has alluded to the notion that he plans to appeal the guilty verdict, as per reporting by Eleanor Terrett.

If CLARITY becomes law and the language regarding retroactive developer protection is included in the draft of the bill that passes, Storm’s legal team should theoretically have no issue winning at the appellate level.

Unfortunately, if CLARITY passes with the retroactive protections included, this will not help the Samourai Wallet Developers, who accepted a plea deal for operating an unlicensed money transmitting business in July.

Further Protection for Developers of Noncustodial Crypto Tech

This most recent draft of CLARITY also stipulates that developers or providers of “non-controlling” (noncustodial) crypto technology shall not be treated as money transmitting businesses under 31 U.S. Code § 5330. This would also be applied retroactively.

Non-controlling developers are defined as those who create or work on “distributed ledger service(s), that in the regular course of operations, does not have the legal right of the unilateral and independent ability to control, initiate upon demand, or effectuate transactions involving digital assets to which users are entitled, without the approval, consent, or direction of any other third party.”

The definition applies to developers of crypto services, software, or hardware that helps customers facilitate the self custody and safekeeping of digital assets.

What Comes Next?

Congress is back in session as of September 2, 2025, and the U.S. Senate Banking Committee plans to continue to prioritize CLARITY, after accepting input on the bill from many members of the crypto industry.

“This legislative draft reflects feedback from hundreds of stakeholders on a wide range of questions as part of the Request for Information (RFI) on the July discussion draft,” a spokesperson from the Senate Banking Committee told Bitcoin Magazine. “Chairman Scott, Senator Lummis, and their colleagues will continue working in a bipartisan way to deliver a final product that will protect investors, foster innovation, and keep the future of digital finance anchored in America.”

No hearings regarding the bill are currently on the Senate Banking Committee’s calendar.

This post New CLARITY Act Draft Could Shield Bitcoin and Crypto Developers From Past Liability first appeared on Bitcoin Magazine and is written by Frank Corva.

Donald Trump has held office as the 47th president of the United States since January 20, 2025. At a little over 200 days, it seems a good time to recap where the “Bitcoin President” has paved the way to make the United States the proclaimed “crypto capital of the world,” and where we will go from here.

First, under Trump’s second presidency, many prominent industry actors have seen favorable outcomes to the legal troubles they had faced under previous administrations. 

Terra/Luna founder Do Kwon reached a plea agreement with the Department of Justice, finding him guilty of just two of the total nine charges for losing investors over $40 billion over the course of days. The second circuit overturned the conviction of former OpenSea product manager Nathan Chastain for insider trading. The SEC dropped its cases against the cryptocurrency exchanges Gemini and Coinbase, paused its lawsuit against Binance and reportedly ended its investigations into Consensys, Robinhood, and Uniswap. 

Meanwhile, Tron founder Justin Sun, who didn’t just face charges by the SEC over offering unregistered securities but was reportedly also subject to a DOJ investigation, now dines with the president.

On the regulatory side, things are also looking up, with everybody and their mother announcing plans to issue stablecoins, from Ripple to the state of Wyoming, thanks to the only legislature that has so far made it into law: the so-called GENIUS Act. And while we still have no idea how much bitcoin the U.S. Government holds, as 200-plus days are apparently not enough to round up a comprehensive audit, the cheer for the bitcoin strategic reserve continues — except that the government appears to have no plans to actually buy the bitcoin, but will rather pivot to seizing it from, well, you.

Everybody Is A Money Transmitter

What’s most notable is that each one of the aforementioned industry players relies heavily on the development of open source technologies. Without open source, not a single one of the mentioned platforms would have anything to trade, let alone to build. And for the developers of open source technologies, the president’s plans seem more than grim.

In July, Samourai Wallet developers Keonne Rodriguez and William Hill pleaded guilty to conspiracy to operate an unlicensed money transmitting business, facing up to five years in federal prison. A week later, Tornado Cash developer Roman Storm was found guilty by a jury in the Southern District of New York of the same offense.

Both prosecutions proceeded despite a memo issued by Deputy Attorney General Todd Blanche in April, which was widely celebrated to put an end to the DOJ’s attempts to make new laws through prosecutions explicitly calling on the DOJ to no longer charge developers of software for the actions of their users. While widely celebrated, the memo left so much room to continue exactly such prosecutions that it was about as reliable as the Trump administration’s promises to release the Epstein list.

Regulatory clarity for developers has since been at an all-time low. According to the outcomes in Samourai Wallet and Tornado Cash, noncustodial software developers may no longer be charged for not having a money transmission license, but they may be charged for the transmission of illicit proceeds. So, are noncustodial software developers money transmitters that could face criminal charges in the U.S.? Your guess is as good as mine.

What’s clear is that the verdict against Roman Storm has set a so-called persuasive precedent, meaning that anyone building non-custodial tools could be charged with a federal offense at the DOJ’s discretion.

Bringing the PATRIOT Act to Digital Assets

In terms of digital asset legislation, the last months have also been turbulent. While the GENIUS Act was much anticipated — though arguably more so by those who wear suits and those who pay for them — it also opened the door to the application of the Bank Secrecy Act, a law that mandates anti-money laundering and KYC requirements.

While the GENIUS Act officially codifies certain rules for stablecoin issuers as financial institutions, the Treasury has since requested public comment on the application of digital identities to so-called DeFi services in relation to the GENIUS Act that would require non-custodial service providers to check a user’s identity credentials before executing transactions.

Overall, the Treasury’s idea is that it’s acting in accordance with one of Trump’s first executive orders on Strengthening American Leadership in Digital Financial Technology, which aims to promote the “responsible growth and use of digital assets, blockchain technology, and related technologies” — keyword being “responsible.”

What is meant by such “responsible” growth was finally revealed in the first White House Digital Assets Report last month, tasking Congress to create new sub-categories in the Bank Secrecy Act for digital assets, as well as asking FinCEN to consider next steps in the Biden-era mixer rule: This regulation that would outlaw pretty much any chance at transactional privacy, including the use of new, non-KYC addresses.

If this may sound unconstitutional to you — since, you know, code is speech in this country — I regret to inform you that where we are going, we won’t need a Constitution. The majority of ideas floated by the president are governed under the PATRIOT Act, which the White House has asked Congress to specifically expand to digital assets — and the PATRIOT Act trumps the Constitution every time, pun very much intended.

In short, the Bitcoin Presidency may sound great on paper, but in reality, the environment to develop code in the U.S. has never been more hostile. The Trump administration must drastically change course if it aims to actually fulfill its promises to Bitcoin users.

Until then, it seems we would be well advised to issue caution when the government invites us to “come home” to build our services in the crypto capital of the world, as you may only get to see it from the inside of a prison cell.

This post 200 Days of the Bitcoin President — Is Donald Trump’s Second Term Cause for Celebration or Concern? first appeared on Bitcoin Magazine and is written by L0La L33Tz.

Today, Acting Assistant Attorney General (AAAG) of the Criminal Division of the Department of Justice (DoJ) Matthew Galeotti gave a talk at an event hosted by the American Innovation Project in which he harped on the point that the DoJ will no longer prosecute open-source crypto developers who have no intent to commit a crime.

AAAG Galeotti began his talk by telling the audience that Deputy Attorney General (DAG) Todd Blanche had asked Galeotti to speak to the audience about the DoJ’s focus on “even-handed enforcement of the law” in the digital asset space.

In AAAG Galeotti’s talk, he referenced a memo DAG Blanche issued in April, in which DAG Blanche stated that the DoJ would end its regulation by enforcement approach, popularized by the Biden administration, as it pertains to the crypto industry and crypto developers.

AAAG Galeotti reiterated and reinforced some of the points from the Blanche memo, producing a number of quotable moments in the process.

Here are some of the high notes he hit:

“The Department will not use federal criminal statutes to fashion a new regulatory regime over the digital asset industry. The department will not use indictments as a lawmaking tool. The Department cannot leave innovators guessing as to what could lead to criminal prosecution.”

“Our view is that merely writing code without ill intent is not a crime. Innovating new ways for the economy to store and transmit value and create wealth without ill intent is not a crime.”

“Generally, developers of neutral tools, with no criminal intent, should not be held responsible for someone else’s misuse of those tools. If a third-party’s misuse violates criminal law, that third-party should be prosecuted — not the well-intentioned developer.”

Prominent voices from the crypto industry posted some of these promising quotes on X:

While other prominent figures from the industry voiced their skepticism, highlighting some of the quotes from AAAG Galeotti’s speech that left cause for concern:

Having listened to the talk myself, I’d love to say I came away from it feeling optimistic, or even cautiously optimistic. (Maybe I feel a little bit of the latter.)

Mostly, though, I feel a healthy skepticism, most comparable to Van Valkenburgh’s, as it seems that AAAG Galeotti left the door open to further prosecutorial overreach by the DoJ.

Put another way, I believe the likes of the Samourai developers and Roman Storm, co-founder of Tornado Cash, would still be prosecuted in the wake of this oration, especially judging by some of the concerning comments AAAG Galeotti made in the latter half of it.

These comments included the following (non-italicized portions of quotes are included for context):

“If a developer merely contributes code to an open-source project without the specific intent to assist criminal conduct, aid or abet a particular crime, or join a criminal conspiracy, he or she is not criminally liable.”

“As the DAG memo makes clear, the Justice Department will not charge regulatory violations in cases involving digital assets, like unlicensed money transmitting under 1960(b)(1)(A) or (B), in the absence of evidence that a defendant knew of the specific legal requirements and willfully violated them. [However] we may under certain circumstances bring cases under 1960(b)(1)(C), which prohibits the transmission of funds that the defendant knows are derived from a criminal defense or are intended to be used to support unlawful activity.”

“Where the evidence shows that software is truly decentralized and solely automates peer-to-peer transactions, and where a third party does not have custody and control over user assets, new 1960(b)(1)(C) charges against a third party will not be approved. Though, if criminal intent is present, other charges may be appropriate — all of the subject’s conduct and the services they provide end-to-end will be considered.”

Having covered both the Samourai Wallet and Tornado Cash cases, I saw a lot of the “evidence” used to illustrate criminal intent for the developers in both cases.

Much of it was rhetoric related to the developers reacting to bad actors using the software they’d created in illicit activities, including instances in which they were seemingly trolling.

The most egregious instance of this being when the Samourai developers invited Russian oligarchs to use their service to evade sanctions:

Now, if I’m speaking plainly, one of the major lessons that crypto developers should have learned from the Samourai and Tornado Cash cases is don’t even joke about bad actors using your service.

With that said, it’s not illegal to joke about it, and in the case of Roman Storm, he made efforts to stop bad actors from using Tornado Cash, including implementing a Chainalysis oracle on the front end of Tornado Cash.

But I’m getting slightly off track here…

The point I’m trying to make is that AAAG Galeotti’s comments about criminal intent can be interpreted broadly, and, because of this, they eclipse many of the more positive points he made about the DoJ not aiming to prosecute crypto developers.

And so I agree with Van Valkenburgh in that we must continue to press Congress for safe harbor via the language in the Blockchain Regulatory Certainty Act (BRCA), some of the language from which has been included in the recent draft of the CLARITY Act, and fight key battles in court.

Because, even in the wake of this seemingly positive talk from AAAG Galeotti, developers are still at risk.

This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

This post Curb Your Enthusiasm: Assistant Attorney General Galeotti’s Talk on Crypto Devs Changes Very Little first appeared on Bitcoin Magazine and is written by Frank Corva.

Today in the Southern District of New York (SDNY), Tornado Cash co-founder Roman Storm was found guilty on the second count on his indictment, conspiracy to operate an unlicensed money transmitting business.

The jury did not come to a unanimous verdict on the other two counts — conspiracy to commit money laundering and conspiracy to violate sanctions.

The jury arrived at this guilty verdict after three and half days of deliberation and after a trial that began in the middle of last month.

As a result of the guilty verdict on the money transmission charge, Storm now faces up to five years in prison.

Judge Failla Rejects Motion To Remand Storm

In the wake of the verdict being issued, the prosecution made a motion to remand Storm into custody, claiming that he was a flight risk.

The defense’s Ms. Klein pushed back on the government’s assertion, stating that Storm had little reason to flee the United States, especially considering that his home in Washington state is tied up in a $2 million bail bond; that his daughter, of which he has partial custody, and girlfriend are based in the U.S. and his parents are green card holders; and that much of the crypto community that’s supported Storm is based in the U.S. and that they’ll hopefully continue to support Storm as he appeals the verdict.

The prosecution claimed that now that Storm has been convicted of a crime, he has more incentive to flee, but the judge wasn’t convinced.

She claimed that the “stability of the verdict is still in play” (likely referring to the notion that Storm will appeal the verdict), before adding that his “incentives have shifted tremendously” and then subsequently denying the prosecution’s motion to remand him.

U.S. Attorney for the SDNY Chimes In

Shortly after the verdict was issued, U.S. Attorney for the SDNY (and former U.S. Securities and Exchange Commission chair) Jay Clayton issued a statement on the verdict.

“Roman Storm and Tornado Cash provided a service for North Korean hackers and other criminals to move and hide more than $1 billion of dirty money,” said Clayton.

“The speed, efficiency, and functionality of stablecoins and other digital assets offer great promise, but that promise cannot be an excuse for criminality. Criminals who use new technology to commit age old crimes, including hiding dirty money, undermine the public trust, and unfairly cast a shadow on the many innovators who operate lawfully,” he added.

“This Office and our partner agencies are committed to holding accountable those who exploit emerging technologies to commit crime.”

Clayton did not acknowledge the memo issued by U.S. Deputy Attorney General Todd Blanche in which Blanche stated the U.S. Department of Justice will “stop participating in regulation by prosecution” in the crypto space and that it will no longer target virtual currency mixing services for the acts of their end users.

He also didn’t mention that the vast majority of funds that moved through Tornado Cash users weren’t proven to have been obtained illicitly.

This post Tornado Cash Trial Concludes: Roman Storm Found Guilty on One of Three Counts first appeared on Bitcoin Magazine and is written by Frank Corva.

Amanda Tuminelli — executive director and chief legal officer for the DeFi Education Fund (“DeFi” includes Bitcoin in Tuminelli’s eyes) — understands well the high-stakes implications of the Tornado Cash trial as it pertains to developers of noncustodial Bitcoin and crypto technology as well as privacy-preserving software.

I sat down to speak with Tuminelli for this week’s episode of Bitcoin Politics.

The release of the episode corresponds with the third and final week of the Tornado Cash trial, as it’s meant to help those curious to better understand what’s happening as the trial comes to its conclusion.

In my interview with Tuminelli, she provided an overview of the three charges being levied against Tornado Cash co-founder Roman Storm, while diving in deep on the conspiracy to operate an unlicensed money transmitting business charge.

Tuminelli is an expert on 18 U.S. Code § 1960, the U.S. federal law that prohibits the operation of a money transmitting business without a proper license. She broke down 18 U.S. Code § 1960, while highlighting that Storm hadn’t violated this statute in creating and operating Tornado Cash, a crypto mixing service built on Ethereum.

Tuminelli and I also discussed the CLARITY Act and the Blockchain Regulatory Certainty Act (BRCA), both of which include language that protects developers of “non-controlling” (noncustodial) crypto technology. These bills stipulate that developers and purveyors of this technology don’t need a money transmitting license, nor should they be subject to existing money transmission laws.

What is more, Tuminelli also touched on why the Department of Justice’s (DoJ) shift away from 2019 FinCEN guidance threatens innovation in the crypto space and how it may create a scenario in which the U.S. government continues to press charges on other developers like Storm (despite the fact that U.S. Deputy Attorney General Todd Blanche stated in an April memo that the DoJ would stop targeting crypto entities including mixing and tumbling services.)

Regarding the Tornado Cash case, she shared her thoughts on how she feels the trial is progressing as well as what the defense might have considered as it made its case to the jury.

Finally, she described the amicus briefs that the DeFi Education Fund has written and submitted to the courts for both the Tornado Cash and Samourai Wallet cases (despite the fact that the court rejected the submission of the brief for the former case).

This video is a must watch for anyone looking to gain a deeper understanding of what’s happening in the Tornado Cash trial as well as what the potential implications of the trial might be.

This post Watch This Interview to Understand the Tornado Cash Trial Better first appeared on Bitcoin Magazine and is written by Frank Corva.