In a letter addressed to the White House AI and Crypto Czar, David Sacks, the DeFi Education Fund has urged the Trump administration to end the Department of Justice’s (DOJ) war on open-source crypto developers. The letter follows the uncertainty surrounding Tornado Cash’s co-founder’s upcoming trial in New York, despite the department’s recent move to end “regulation by prosecution.”
White House Urged To Take Action
On Monday, the DeFi Education Fund shared a letter sent to US President Trump’s Crypto Czar, asking the White House to take immediate action to stop the “Biden-era Department of Justice’s (DOJ) lawless campaign to criminalize open-source software development” and the Southern District of New York’s (SDNY) ongoing prosecution of Tornado Cash’s co-founder, Roman Storm.
It states that the SDNY is trying to hold software developers criminally liable for how third parties use their code in a “novel” and “unprecedented” theory, which threatens the foundation of technological innovation and could set a precedent that potentially halts crypto development in the US.
DeFi Education Fund's letter to Trump's Crypto Czar. Source: DeFi Education Fund
“This kind of legal environment does not just chill innovation — it freezes it; it empowers politically-motivated enforcement and puts every open-source developer at risk, regardless of industry. No one writing code in good faith should have to fear prosecution for the actions of strangers,” the DeFi Education Fund wrote.
The letter highlighted that the SDNY is continuing its prosecution of Storm with charges related to money transmitting and other liabilities that could punish the Tornado Cash co-founder for the conduct of unrelated bad actors.
For context, the Treasury Department’s Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash in 2022 for “failing to impose effective controls” preventing malicious actors from laundering funds through the protocol, including $455 million by North Korea-linked Lazarus Group.
Since then, a November court ruling determined the US Treasury had exceeded its authority by sanctioning the platform, and the crypto mixer was delisted from OFAC’s Specially Designated Nationals (SDN) in March 2025.
Nonetheless, Storm and Tornado Cash’s developer, Alexey Pertsev, were detained following the sanctions, with the latter serving a 5-year sentence in the Netherlands after being found guilty of money laundering by the s-Hertogenbosch Court of Appeals in May 2024.
Meanwhile, Storm pleaded not guilty to all charges and was freed on a $2 million bond to await his trial, initially scheduled for December 2024. However, it was delayed to April 14, 2025, before being postponed again to July 2025. If convicted, he could face up to 45 years in prison.
Several industry leaders, including Ethereum’s co-founder Vitalik Buterin, have expressed concern about the case’s implications for crypto developers and donated to Storm’s and Pertsev’s legal defense.
US Crypto Innovation At Risk
According to the DeFi Education Fund, the SDNY actions contradict previous guidance regarding the status of self-custodial, peer-to-peer (P2P), which developers have relied on since 2019:
Even more troubling, the government’s actions directly contradict long-standing guidance issued by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), which for years has provided clarity that developers of self-custodial, peer-to-peer protocols are not considered money transmitters. We in the blockchain industry have relied on that guidance in good faith since 2019 – which is when it was issued by President Trump’s first Treasury Department.
The letter, which has been signed by industry figures like Paradigm’s CEO Matt Huang, COO Alana Palmedo, and CLO Katie Biber, notes that a recent DOJ memo expressed principles “that reflect longstanding FinCEN guidance on money transmission laws.”
As reported by Bitcoinist, US Deputy Attorney General Todd Blanche sent a memo to the DOJ employees explaining it was ending its “regulation by prosecution” approach. In the April 7 memo, the DOJ notified its staff that the National Cryptocurrency Enforcement Unit (NCET), dedicated to crypto-related investigations, would be disbanded “effective immediately.”
The move reportedly followed the Trump administration’s efforts to develop clear regulatory guidelines to protect investors and develop the industry, including the US Securities and Exchange Commission’s (SEC) actions to end the previous “regulation by enforcement” approach.
The DeFi Education Fund concluded the letter asking President Trump to “protect American software developers, restore legal clarity, and end this unlawful DOJ overreach. The job’s not finished, and the stakes could not be higher.”
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