DOJ’s new policy memo announcing a big change in crypto enforcement strategy has set off quite a firestorm, and for good reason. It’s a difficult balancing act between introducing regulations that we desperately need and undermining the innovation that truly makes crypto so exciting. The reality is that conversation is too often being driven by the bad actors out there – namely, voices in Silicon Valley and Washington D.C. What about the forgotten voices? The people in developing countries for whom crypto is more than an investment, but a lifeline?

Freedom vs Risk: A False Dichotomy?

Is the alternative really the unregulated wild west on one side versus a regulatory police state on the other? The DOJ’s memo seeks to prevent “regulation by prosecution.” It risks losing many of these invaluable protections in the process. It is encouraging to read about a movement away from arbitrary and capricious enforcement. The potential for complete lack of prosecutions for criminality is quite horrific indeed. Think about it: the memo states the DOJ will no longer target virtual currency exchanges, mixing services, and offline wallets for the acts of end users. This loophole would inadvertently create safe harbors for money launderers and drug traffickers. It might shield the folks who contribute to the most heinous of crimes — child sexual exploitation. Is this the price of innovation? Absolutely not.

Here’s the thing—what if the true issue isn’t the kind of regulation, but rather where it comes from? The DOJ’s memo takes explicit aim against “regulation by enforcement,” in which agencies such as the SEC determine what’s acceptable behavior through individual actions. This just stinks of a power grab, a back-door way to legislate while not really, you know, legislating. It’s as if a teacher kept changing the rules during a game of musical chairs, and it creates a culture of fear and suspicion.

Forgotten Voices: The Third-World Crypto User

Here's where the "unexpected connection" comes in. We should stop seeing crypto only as a speculative asset for the ultra-rich. Perhaps most importantly, it stands to help power the economies of developing countries. For millions, crypto is a way to escape shady banks, gain access to micro-loans, and get remittances without high transaction costs. It’s an opportunity to engage in the global economy, sometimes for the very first time.

Consider the example of a single mother in Venezuela depending on crypto to get money from family members who have gone to find work overseas. Now, picture that same small business owner in Nigeria being able to use crypto to access loans he couldn’t otherwise acquire. These are the stories we don’t usually see or hear, the faces behind the numbers. Over-regulation, even in the name of a good cause, could quickly slam the door shut on these prospects.

The DOJ's shift, while aiming to avoid deterring innovation, could unintentionally harm those who stand to benefit the most from it. Moving forward, we call for a more nuanced approach — one that recognizes the need for security while embracing the opportunities that financial inclusion can provide. This isn't just about protecting investors from fraud; it's about empowering individuals in underserved communities.

What's Next? A Path Forward

So, what's the solution? What we really need is clarity and not just from the DOJ, but from Congress. Regulatory certainty that provides a framework for minimizing the risks of bad actors engaging in illicit activity while creating space for innovation. We must ensure that we don’t make regulations so onerous that they have a negative impact, especially on people living in developing nations.

  • Congress Needs to Act: The regulatory vacuum needs to be filled with clear legislation.
  • International Collaboration: Crypto is global; regulation needs to be too.
  • Focus on Education: Empower users with the knowledge to navigate the crypto landscape safely.

Now, senior Binance executives reportedly are meeting with U.S. Treasury Department officials. To start, the idea of “loosening U.S. government oversight” raises a massive red flag. Though dialogue is necessary, we cannot let these same powerful companies set the terms of the game behind closed doors. Transparency is paramount.

The future of crypto depends on whether we can achieve this balance. We need to keep investors safe and stop money laundering. While doing all of this, we need to make sure that cryptocurrency can be a powerful economic empowerment tool for so many. The DOJ's shift is a step in one direction, but it's up to us to ensure that it leads us to a future where crypto benefits everyone, not just a select few. The stakes are too high to get this wrong.

Make no mistake—this goes well beyond crypto, and is about justice, equality, and the future of finance. On what side of history do you want to be?