Podcast Summary: Unchained – "DEX in the City: Is Now the 'Perfect Time to Launch a Crypto Scam'?"

Date: February 13, 2026
Host: Jesse Brooks (standing in for Katherine Kirkpatrick), with co-host “V” and guest Peter Van Valkenburgh (Coin Center)

Episode Overview

In this episode of Unchained’s “DEX in the City,” guest host Jesse Brooks and co-host V welcome Peter Van Valkenburgh, Director of Research at Coin Center. The conversation delves deeply into the current state of crypto regulation, particularly focusing on market structure legislation, protections for software developers, and the legal risks surrounding unlicensed money transmission and money laundering charges. The trio also touch on cultural moments (the Super Bowl) and the public perception of crypto, sparking frank reflections on the industry’s current challenges.

Key Discussion Points & Insights

1. Coin Center’s Mission and Evolution

• Background (04:14):
  • Coin Center, founded in 2014, was established as a civil liberties nonprofit rather than a trade association, advocating for software developers’ rights—particularly focusing on open-source, decentralized financial technologies like Bitcoin and Ethereum.
  • Peter Van Valkenburgh:
    • “We think of ourselves…as a civil liberties firm that’s focused simply on guaranteeing that people who want to develop…open innovations…are protected from undue prosecution or regulatory treatment.” [04:14]
  • Emphasis is on protecting the builders of “neutral infrastructure” rather than centralized actors that mimic banks.
• Overlap with AI (07:35):
  • While their mission is crypto-specific, legal precedents here will likely influence developer liability for AI and other decentralized technologies.

2. Market Structure Legislation: State vs. Federal Regulation

• Fragmentation of Oversight (09:58):
  • Crypto businesses currently face regulatory complexities, needing separate licenses across many jurisdictions—unlike banks, leading to calls for a unified federal approach.
  • The Market Structure Bill aims to address this, establishing national oversight (likely via the SEC/CFTC) for trusted custodial companies, while protecting pure software publishers.
• Developer Liability (09:58):
  • The main advocacy focus: ensuring that those merely publishing open-source software—without custodial control—aren’t prosecuted as unlicensed money transmitters or required to register like broker-dealers.

3. Decentralization, Control, and the Law

• Binary Debate on 'Control' (14:29, 16:09):
  • The bill’s effectiveness relies on how “control” is defined—which has been a sticking point for builders, policymakers, and legal advisors.
  • V:
    • “It’s hard, right, because until we understand how control is actually defined…the language right now is not…helpful for us. Like we are potentially at risk of being criminally prosecuted.” [20:07]
• The Blockchain Regulatory Certainty Act (BRCA) & Admin Keys (16:09, 20:59, 24:28):
  • The BRCA codifies FinCEN’s guidance: only entities with “independent control” of funds are money transmitters.
  • There is legal “clearance” for protocols with limited admin functions, i.e., pause or emergency response features, not ongoing fund custody.
  • Rulemaking will refine definitions via multiple factors; builders need to monitor these developments for compliance.

4. How Money Laundering Statutes Interact With Crypto (33:49–43:31)

• Difference Between Money Transmission and Money Laundering Laws:
  • Peter:
    • “BRCA doesn’t change 18 USC 1956, which is the money laundering statute. It only changes 18 USC 1960 [unlicensed money transmission]…It wouldn’t limit prosecutions…except in the very narrow case where they try to prosecute someone…for creating tools that other people used to transfer money.” [36:46]
  • Money laundering charges require proof of intent and agreement; publishing a tool later used for illicit purposes should not, in itself, create criminal liability.
• Implications of Overcharging Developers:
  • Going after software writers for how their code is abused sets a dangerous precedent and diverts limited law enforcement resources from targeting actual criminals.

5. Law Enforcement Challenges and Victim Advocacy

• Resource Constraints (48:28):
  • There’s a mismatch between the resources available to law enforcement and the scale of fraud/crime in crypto.
  • DOJ and CFTC enforcement resources are diminishing, ironically as crypto-related crime is rising—making this “the perfect time to launch a crypto scam.”
  • Jesse:
    • “It just sort of feels like regardless where you stand…we can’t have it both ways. We’re focusing so much on…legislated clarity, but…the cartels…aren’t waiting for us to figure it out…I heard that 97% of fentanyl precursor manufacturers…accept crypto.” [47:21]
• Victims’ Voices:
  • The panel laments that victims of crypto crime rarely feature in debates; their experiences should carry more weight in shaping regulation without stifling innovation.

6. Super Bowl, Public Perception, and 'The Rug'

• Coinbase Super Bowl Ad—Reception & Reflections (52:33):
  • Mixed reactions in the crypto industry; while viral, it fueled perceptions of crypto as a “giant online casino.”
  • Peter:
    • “But the average American feels like they were rugged…all it is is just online sports betting without a regulator. That’s fucking stupid and everyone in crypto should be ashamed of that.” [53:39]
  • He doubles down on the need for genuine financial freedom tools, not get-rich-quick schemes, lest the movement betray its potential and public.

Notable Quotes and Memorable Moments

• On Coin Center’s Civil Liberties Foundation:

  • “We…are a civil liberties firm…guaranteeing…open innovations…are protected from undue prosecution…”
    (Peter, 04:14)

• On the Law’s Bluntness:

  • “1960…they define as basically everything, and you didn't have a license…you’re guilty. It’s basically a strict liability federal felony. And that's a problem.”
    (Peter, 41:38)

• On the Need for More Nuanced Conversations:

  • “Part of the problem…the crypto industry and lawyers in the crypto industry…have created is this binary conversation of control and not control.”
    (Jesse, 25:26)

• On Law Enforcement Resource Limits:

  • “If you send DOJ on a wild goose chase to arrest everybody who wrote software that bad people use…you’re not going to be going after the bad people anymore…it's a misallocation of resources and it betrays victims of crimes.”
    (Peter, 48:28)

• On the Industry’s Current Malaise:

  • “Crypto has a terrible reputation right now because it’s mostly just like a giant online casino, which is unfortunate.”
    (Peter, 52:33)
  • “The average American feels like they were rugged. They were told this is going to be a force for financial freedom, and all it is is just online sports betting without a regulator…everyone in crypto should be ashamed of that.”
    (Peter, 53:39)

Timestamped Highlights

• [04:14]: Peter introduces Coin Center and its guiding mission
• [09:58]: The Market Structure Bill and why developer liability matters
• [16:09–20:59]: Defining “control” and administrative keys in regulation
• [33:49–43:31]: The difference between money transmission and money laundering prosecutions; implications for developers
• [48:28]: The case for focusing law enforcement resources on real criminals rather than software developers
• [52:33]: Super Bowl conversation; public perception of crypto and Peter’s emphatic critique of the industry’s missteps

Tone and Style

The episode maintains a candid, at times self-critical, and earnest tone. Panelists blend sharp legal analysis, inside-baseball policy commentary, and moments of frustration (and even humor) at both the state of the industry and its regulatory challenges. There’s a palpable sense of both urgency and commitment to ensuring crypto can fulfill its promise—if it learns from current shortcomings.

Summary Takeaway

This episode provides a focused, clear-eyed look at the tension between protecting software innovation and preventing financial crime in crypto. Key legislation might offer long-awaited clarity for “neutral” infrastructure builders, but real progress will depend on nuanced lawmaking, adequate law enforcement resources, and the industry’s willingness to confront its own failings in public trust. For listeners, it’s a valuable window into both the legal frontlines and the cultural crossroads facing crypto today.