The so-called protections for non-custodial developers are not real shields but sentencing reductions at best. The core issue remains that the door stays open for prosecution under conspiracy statutes. That means the mere possibility that your open-source code could be used for illicit activity is enough to bring down forty years of potential prison time.
The self-custody language looks harmless until you read the carve-outs and agency powers that are preserved. Every relevant regulatory body retains full authority to enforce an extensive list of statutes dealing with illicit finance and sanctions. That is not a narrowing of government power. That is a restatement that nothing here will impede it.
The KYC angle on self-hosted wallets is especially concerning. Even with the nuanced Treasury guidance language, the text still aligns with the global trend towards address verification. Once infrastructure is built to verify wallet ownership it rarely stops at the minimal use case. It expands over time and that is precisely how surveillance creep operates.
Amending the Patriot Act to give Treasury the explicit authority to prohibit specific crypto transaction types is a serious escalation. Mixers and privacy-enhancing transaction methods are already in the crosshairs. This sets up the infrastructure for broader prohibitions whenever political or enforcement priorities shift.
The so-called protections for non-custodial developers are not real shields but sentencing reductions at best. The core issue remains that the door stays open for prosecution under conspiracy statutes. That means the mere possibility that your open-source code could be used for illicit activity is enough to bring down forty years of potential prison time.
The self-custody language looks harmless until you read the carve-outs and agency powers that are preserved. Every relevant regulatory body retains full authority to enforce an extensive list of statutes dealing with illicit finance and sanctions. That is not a narrowing of government power. That is a restatement that nothing here will impede it.
The KYC angle on self-hosted wallets is especially concerning. Even with the nuanced Treasury guidance language, the text still aligns with the global trend towards address verification. Once infrastructure is built to verify wallet ownership it rarely stops at the minimal use case. It expands over time and that is precisely how surveillance creep operates.
Amending the Patriot Act to give Treasury the explicit authority to prohibit specific crypto transaction types is a serious escalation. Mixers and privacy-enhancing transaction methods are already in the crosshairs. This sets up the infrastructure for broader prohibitions whenever political or enforcement priorities shift.