Two senators in the United States have expressed their disagreement with the attorney general’s legal interpretation regarding the prosecution of cryptocurrency mixing services. Senators Ron Wyden and Cynthia Lummis have challenged the Department of Justice’s (DOJ) stance, arguing that services like Tornado Cash should not be classified as money transmitters, aligning themselves with the former Treasury Department’s opinions.
The lawmakers have criticized the DOJ’s approach towards companies such as Samourai Wallet and Tornado Cash, urging Attorney General Merrick Garland to clarify the unprecedented interpretation of the law that deems cryptocurrency software services illegal money transmitters. They emphasize that the Financial Crimes Enforcement Network (FinCEN) of the Treasury Department has already stated that non-custodial crypto services do not fall under the category of money transmitters.
Wyden has specifically objected to the DOJ’s interpretation, which could potentially lead to software developers being imprisoned for simply writing and publishing code that others later use. He warns that this could set a dangerous precedent, violating the law and raising First Amendment concerns. In their letter dated May 9, the senators argue that subjecting developers of non-custodial crypto asset software, not covered by the FinCEN ruling, to criminal liability goes against the well-established interpretation of this provision.
The DOJ, in a court filing, has also asserted that FinCEN’s guidance on crypto mixers does not address the concept of “control.” However, the senators’ letter contradicts this view, stating that the rule considers the service to have control over the funds, thereby classifying it as a transmitter. Lummis compares blaming wallet software for illicit finance to holding a highway responsible for a bank robber’s getaway car.
Meanwhile, Congress is grappling with legislation related to digital assets, which will serve as the foundation for comprehensive US regulations governing the industry, including measures to combat money laundering. However, the chances of passing extensive legislation this year are slim. Therefore, federal authorities must operate within the confines of existing laws in such cases.
