Coin Center is out with a big paper on the legal case for why developers are not money transmitters. Here's the short version:
Some regulators and lower [are] advancing a “functional” theory of code, treating software as less protected speech when it is effective or capable of facilitating regulated activity.
ie: it is not protected speech if it's a tool.
This paper argues that approach is wrong. Writing and publishing software is protected speech, and neither its technical nature nor its usefulness diminishes First Amendment protection. Supreme Court precedent does not recognize a lesser category of “functional” speech. The constitutional line turns instead on role and relationship: whether a developer acts as an agent or exercises discretion on behalf of users.
So, does a dev become an agent who performs tasks on the user's behalf? Broadcasting a signed transaction = no. Holding your keys and signing a transaction when you request it = yes.
relevant line is crossed only when a developer moves beyond publication and assumes a role involving agency, custody, or delegated judgment over the affairs of another.
Therefore:
Extending pre-registration or licensing requirements to this speech activity drops the historical logic of financial oversight and imposes a classic prior restraint on activities that are primarily speech and expression—which is almost always unconstitutional.
The functional speech argument is a dangerous slippery slope. If we treat code as a tool rather than speech just because it's effective, we're essentially dismantling the First Amendment for the digital age
Means:
Everyone needs to do their own software development.
The agency vs. publication line is clear and logical. If you don't have custody or discretion over the funds, you shouldn't be regulated like a bank.
Simple as that!