As an analyst with a background in financial regulatory compliance and cryptocurrency, I strongly agree with Senators Lummis and Wyden’s concerns regarding the Department of Justice’s (DOJ) interpretation of money transmitter licensing for non-custodial crypto service providers. Based on my understanding of the Bank Secrecy Act and FinCEN guidelines, I believe that their argument holds merit.
In a letter penned to Attorney General Merrick Garland, Senators Cynthia Lummis and Ron Wyden expressed their worries over the Justice Department’s stance on money transmitter licensing. They particularly focused on the ongoing case against Roman Storm, who is the co-founder of Tornado Cash, and faces charges for operating an unlicensed money transfer business.
As an analyst, I believe President Biden’s Department of Justice (DOJ) is making a legally questionable move by challenging the long-standing interpretation of FinCEN regulations regarding Bitcoin development in the United States. This potential shift could inadvertently criminalize software creation related to the digital currency, which is not only unwarranted but also detrimental to innovation and technological progress in America. My colleague, Senator Ron Wyden, and I have sent a bipartisan letter to the DOJ urging them to reconsider this interpretation promptly and avoid any unintended consequences for the Bitcoin community and the broader tech industry.
— Senator Cynthia Lummis (@SenLummis) May 13, 2024
Senators Lummis and Wyden argue that non-custodial crypto service providers do not fall under the definition of money transmitters as outlined in the Bank Secrecy Act and FinCEN. They emphasize that the ownership of bitcoins is transparent throughout transactions, making it unnecessary to adhere to the Department of Justice’s interpretation of custody and control.
Senators remind us of FinCEN’s role in determining money transmission regulations and issue a warning against overusing the Department of Justice’s standard, as its broad implementation might negatively impact several services.
The attempt by prosecutors to dismiss the charges against Tornado Cash was unsuccessful, as they continue to believe that Storm is both the creator of Tornado Cash and implicated in illicit activities using it. The evolving landscape of crypto regulations raises queries concerning how conventional legal frameworks can effectively keep pace with technological advancements.
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2024-05-14 01:41