Bitcoin Policy Institute Launches a Fund to Protect Non-custodial Assets from Regulatory Threats

The Bitcoin Policy Institute (BPI) has announced the launch of its Peer-to-peer rights fund, a strategic initiative aimed at protecting the decentralized, peer-to-peer integrity of the Bitcoin ecosystem. The fund’s mission is to protect non-custodial instruments and their developers from regulatory overreach, ensuring that innovation, privacy and user autonomy remain protected.

The Peer-to-Peer Rights Fund is committed to protecting the decentralized nature of Bitcoin through strategic litigation and advocacy. By supporting critical legal cases and providing essential regulatory guidance, the fund strives to establish a fair legal framework that promotes the growth and resilience of Bitcoin’s open source community.

BPI has argued that Bitcoin’s success lies in its peer-to-peer foundation, which sets it apart from other attempts at electronic money, as this decentralized, open source instrument is powered by its users and free from the influences of greed, corruption, politics or overregulation. Developers around the world have built non-custodial tools that preserve the essence of Bitcoin, including multi-signature wallets, Lightning Service Providers, and Coinjoin Coordinators, which improve security, enable low-cost transactions, and ensure privacy.

Recently, US regulators have changed their stance and threatened the non-custodial ecosystem by going after the developers of open-source tools and companies like Tornado Cash, Samurai Wallet, Uniswap and MetaMask. These cases could lead to adverse legal precedents, putting the non-custodial Bitcoin ecosystem in the United States at risk, as the government’s broad interpretation suggests that anyone who facilitates the transfer of funds should be regulated under Bank Secrecy Act, regardless of the control of funds. This could extend regulations to several non-custodial Bitcoin tools, impacting developers of hardware wallets, transaction broadcast nodes, miners, and collaborative custodial services.

The fund’s first project is defending Keonne Rodriguez and William Lonergan Hill, founders of Samurai Wallet. Rodriguez and Hill face cost of conspiracy to commit money laundering and operating an unlicensed money services business.

“Plaintiffs’ attempt to classify Samourai’s non-custodial Coinjoin tool as a money services company risks setting a damaging precedent that could impact the entire Bitcoin ecosystem,” said David Zell, co-founder of BPI. “By defending this case, the Fund aims to ensure that the court understands the technology and legal principles at stake, and pursues a favorable outcome finding that non-custodial privacy tools cannot be regulated under the Bank Secrecy Act. ”

The outcome of Rodriguez and Hill’s case could significantly impact the future of non-custodial Bitcoin tools and the broader decentralized finance landscape. Through this fund, BPI aims to ensure that innovation within the Bitcoin ecosystem can thrive under a fair and equitable legal framework, by providing critical resources to lawyers, sponsoring amicus briefs, and supporting impact litigation.

For more information or to donate, visit their website here.

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