Senators challenge DOJ’s crypto mixer prosecution stance

Two U.S. senators disagreed with the attorney general, challenging the Department of Justice’s (DOJ) legal interpretation in prosecuting cryptocurrency mixing services. The senators assert that services such as Tornado Cash are not money transmitters, a position following the former Treasury Department’s opinions.

Lawmakers slam DOJ crypto stance

Senators Ron Wyden and Cynthia Lummis have asked Attorney General Merrick Garland to explain the unprecedented interpretation of the law, which makes cryptocurrency software services illegal money transmitters. The senators have voiced their worries about the DOJ’s strategy against firms such as Samourai Wallet and Tornado Cash. They emphasize that FinCEN of the Treasury Department has already declared that non-custodial crypto services are not classified as money transmitters.

Wyden disagreed with the DOJ’s interpretation of the law, which could put software developers in jail for just writing and publishing the code later used by others. He cautioned that this may create a dangerous precedent that violates the law for a long time and provokes the First Amendment issues. The senators’ letter, dated May 9, argued that the possibility of criminal liability for the developers of the non-custodial crypto asset software not covered by the FinCEN ruling goes against the well-known interpretation of this provision.

First Amendment concerns raised

In a court filing, the DOJ also stated that FinCEN’s guidance on crypto mixers did not touch on the idea of ‘control. ‘ The senators’ letter, on the other hand, contradicted such a view, saying that the rule gives the service the funds to be treated as a transmitter. Lummis said that the wallet software is not to be blamed for illicit finance, just like a highway is to be blamed for the bank robber’s getaway car.

On the other hand, Congress is struggling with the digital assets legislation that will be the basis of the new legislation establishing the complete U.S. rules for the industry, including protection from money laundering. Nevertheless, the probability of broad-scale legislation being enacted this year is very low. Therefore, the federal authorities must work under the existing law in such a case.