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

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.

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.

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.

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.

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