A group of crypto companies and advocacy groups is urging Congress to review how the Department of Justice (DOJ) is applying certain laws in its case against the developers of Tornado Cash, a crypto mixing platform.
In a letter sent on March 26 to key committees in the Senate and House, 34 organizations raised concerns about what they see as a broad and unusual reading of laws related to money transmission.
Led by the DeFi Education Fund and signed by Coinbase
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and Kraken
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, the group says the DOJ’s approach adds confusion and could make “essentially every blockchain developer” vulnerable to criminal charges.
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The letter explains that two parts of US law define what it means to run a “money-transmitting business”. One section, Title 31 section 5330, requires such businesses to be licensed. The other, Title 18 section 1960, makes it a crime to operate one without a license.
The group argues that the DOJ is ignoring the connection between the two sections and instead using a narrow reading to build its case.
They also point to a 2019 statement from the Financial Crimes Enforcement Network (FinCEN), which said that software developers who do not hold or manage customer funds are not considered money transmitters. The letter says the DOJ overlooked this guidance when pursuing the Tornado Cash case.
The result, the group claims, is a situation where “two separate US government agencies” interpret the same term differently. This creates legal uncertainty and makes it hard for developers to know what is allowed.
On March 23, Paul Grewal, Coinbase’s chief legal officer, pushed back against the US Treasury’s decision to remove Tornado Cash from its sanctions list. Why? Read the full story.
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.
