Sacramento District Attorney Thien Ho is warning that federal overreach in crypto regulation is stifling innovation and driving American developers overseas. Ho, who led the prosecution of the Golden State Killer using innovative genetic genealogy, draws a parallel between that breakthrough and the promise of blockchain technology.
Ho argues that federal prosecutors have misused a statute designed for money-transmitting businesses-Section 1960-to target software developers who built open-source, noncustodial blockchain tools. These developers, he says, never held user funds or operated as financial intermediaries.
"That is not justice; that is overreach," Ho writes in an op-ed. He warns that the "regulation-by-prosecution" approach has contributed to the U.S. share of open-source developers falling from 25% in 2021 to 18% in 2025.
The Department of Justice issued a memo in April 2025 vowing to end this practice, but Ho emphasizes that only a law-not a memo-provides lasting clarity. He supports the Promoting Innovation in Blockchain Development Act, which aims to restore Section 1960's original intent.
Ho stresses the importance of distinguishing between the tool and the criminal. "We don't charge email providers for wire fraud. We identify the actual bad actor," he says. He calls for strong enforcement against genuine criminals while protecting innovators from overreach.