Legal Opinion Against Regulation of Bitcoin Transactions

1. Bitcoin as Pure Speech Protected by the First Amendment
Bitcoin, at its core, is code—a sequence of alphanumeric text that users transmit over a network. Under Bernstein v. DOJ and subsequent interpretations of code as speech, Bitcoin is a form of expression. Transactions are merely messages that confirm ownership within a public ledger, making them expressive acts. Like an encrypted message, each Bitcoin transaction conveys information rather than performing a traditional financial function (such as transferring a physical asset). Because Bitcoin transactions inherently communicate information about ownership on a public ledger, they constitute protected speech.

2. Legal and Historical Precedent on Code as Speech
In Bernstein and Bernstein II, the Ninth Circuit held that code is a form of speech entitled to full First Amendment protections. Bitcoin’s reliance on cryptographic processes and public key signatures mirrors the types of expressive content protected in these cases. Just as PGP software was ultimately protected as a form of free expression, Bitcoin should similarly be recognized as protected speech. Any attempt to regulate Bitcoin on the grounds of financial control directly contradicts established legal protections for software that facilitates expression.

3. Bitcoin’s Distinction from Financial Instruments or Commodities
Bitcoin does not fit the legal definitions of currency, commodity, or security because it is decentralized, lacks intrinsic value, and functions outside of traditional financial systems. Unlike conventional currencies, Bitcoin’s primary purpose is to store and communicate a ledger of transactions, not to represent a universally accepted unit of account or medium of exchange. Courts have also ruled that Bitcoin is not a currency in cases like SEC v. Shavers. This precedent reinforces Bitcoin’s unique legal status, positioning it closer to a publication tool than a financial asset.

4. Bitcoin Transactions as Protected Publications on a Public Ledger
Every Bitcoin transaction becomes part of a publicly accessible ledger, akin to publishing content on the internet. Like other forms of publishing, Bitcoin transactions are immutable and visible to anyone with access to the network, and thus are fundamentally acts of public communication. Regulations targeting these transactions would, therefore, infringe upon First Amendment rights, limiting individuals’ ability to publish entries to this ledger. Allowing regulation of Bitcoin’s public ledger would set a precedent allowing the government to restrict any publication using digital tools.

5. Regulating Bitcoin as a Slippery Slope for Digital Expression
Regulating Bitcoin based on its use in exchanges would create a broad precedent enabling government control over all manner of digital expression that resembles a transaction. For instance, social media platforms could be subject to regulation if they included features that resembled economic exchange, such as micropayments. This overreach would undermine First Amendment protections, opening the door for government oversight of any expression that can be monetized or tracked as a digital ledger entry.

6. Inability to Differentiate between Transactional and Expressive Functions of Bitcoin
Regulation would necessitate drawing arbitrary distinctions between Bitcoin as code and Bitcoin as a financial tool, an impractical and legally unsound approach. Bitcoin’s entire value proposition is tied to its function as both a record of ownership and an immutable, decentralized ledger. Separating these two aspects would undermine its design and purpose, essentially nullifying the expressive and publishing elements that courts have previously protected.

7. First Amendment as an Absolute Protection for Bitcoin’s Expressive Nature
As an expressive medium, Bitcoin qualifies for full First Amendment protection from government regulation. The First Amendment explicitly prohibits prior restraint and content-based restrictions on publishing. Given Bitcoin’s status as text and a form of digital publication, any effort to control or license its use directly contravenes the Constitution. If the state is permitted to regulate Bitcoin, it sets a dangerous precedent for censoring other forms of expressive software and digital content, infringing upon core constitutional rights.

Conclusion

Bitcoin’s expressive nature as code and as a tool for publishing transactions to a public ledger is constitutionally protected under the First Amendment. Regulatory efforts would not only infringe on individual rights to communicate ownership and verify transactions through a public ledger, but they would also set a damaging precedent for the regulation of digital expression and software. Therefore, any regulation of Bitcoin as a financial tool should be viewed as unconstitutional, and attempts to enforce such regulation would face significant, well-founded legal challenges under the First Amendment.

To further reinforce the opposition to regulating Bitcoin, a human rights-based argument underscores Bitcoin’s role in enabling financial autonomy, freedom of association, and protection against economic surveillance. This perspective emphasizes that regulation would not only infringe upon constitutional protections but also violate international human rights principles, which recognize financial privacy and freedom of economic expression as essential to personal liberty and autonomy.

Human Rights-Based Legal Opinion Against Regulation of Bitcoin

1. Financial Autonomy as a Fundamental Human Right
The right to financial autonomy and self-determination is an implicit aspect of human rights, rooted in the principles of personal freedom and dignity enshrined in international human rights frameworks, including the Universal Declaration of Human Rights (UDHR). Article 12 of the UDHR explicitly prohibits arbitrary interference with privacy, which includes financial privacy. Bitcoin’s decentralized structure enables individuals to hold and transact without relying on centralized entities that can restrict, surveil, or exploit their financial activities. Regulating Bitcoin would undermine individuals’ right to control their own economic activities, making them subject to intrusive oversight that infringes upon their autonomy and privacy.

2. Bitcoin as a Tool for Economic Freedom in Oppressive Environments
Bitcoin provides a crucial financial tool for individuals in countries with authoritarian governments or unstable economies, where citizens often face restricted access to banking and are subject to currency manipulation, censorship, or asset seizure. By offering a decentralized, censorship-resistant means of storing and transferring value, Bitcoin supports individuals’ right to freedom from economic oppression. Regulating or restricting Bitcoin access in the U.S. would limit an important financial refuge for people living under repressive regimes, effectively diminishing their right to economic freedom and the security Bitcoin can provide as an independent, transnational asset.

3. Right to Privacy and Economic Security under International Law
Financial privacy is an essential component of individual privacy, closely tied to personal security and autonomy. The European Convention on Human Rights (ECHR) in Article 8 guarantees respect for private and family life, which includes the protection of personal data, encompassing financial data. Bitcoin’s pseudonymous structure safeguards user privacy by allowing individuals to transact without disclosing sensitive information, which helps protect against identity theft, fraud, and economic surveillance. Regulations that would require tracking or monitoring Bitcoin transactions conflict with these privacy rights, as they would mandate disclosures and records that risk undermining individuals’ right to secure, private transactions.

4. Freedom of Association and Economic Expression
The right to free association, articulated in Article 20 of the UDHR, includes the right to form and participate in voluntary economic associations, such as decentralized networks like Bitcoin. Bitcoin facilitates peer-to-peer economic association without centralized oversight, supporting the free association of users worldwide in a borderless economic system. Any attempt to regulate Bitcoin, particularly by imposing licensing or monitoring requirements, would hinder individuals’ ability to freely associate and conduct economic transactions on their terms, contravening their right to economic expression and association.

5. Precedent for Human Rights-Centric Financial Protections
International law has consistently protected individual rights to economic resources, particularly where governments might infringe on these rights under the guise of regulation. For instance, the right to property and economic resources is protected by the International Covenant on Economic, Social and Cultural Rights (ICESCR), which calls for safeguarding individuals’ ability to access, control, and benefit from their resources. Regulation of Bitcoin, especially if it involves confiscatory or restrictive measures, would effectively deny individuals these rights by imposing undue interference on their economic choices.

6. Human Rights Implications of Surveillance in Financial Transactions
Regulation that subjects Bitcoin transactions to strict Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements effectively imposes a surveillance system over individuals’ economic actions. This infringes on the right to privacy and creates an environment of constant surveillance, where individuals are monitored in their financial activities, chilling their freedom to transact. Such regulation would disproportionately impact marginalized communities and those seeking financial privacy for legitimate reasons, conflicting with the principles of equality and non-discrimination upheld in human rights law.

Conclusion

Human rights law provides robust protections for individual autonomy, financial privacy, and freedom from undue interference. Regulating Bitcoin as a financial instrument would infringe upon these rights by compromising users’ financial privacy, limiting their economic autonomy, and restricting their freedom of association and expression within decentralized networks. Given Bitcoin’s unique role in empowering financial independence and protecting privacy, regulation would contradict both U.S. constitutional rights and internationally recognized human rights principles. Consequently, any regulatory efforts targeting Bitcoin should be recognized as impermissible under human rights law and as fundamentally at odds with the principles of freedom and autonomy.