According to CoinDesk, two U.S. senators have written to the attorney general, challenging the Department of Justice's (DOJ) legal interpretation in its prosecution of cryptocurrency mixing services. The senators argue that services like Tornado Cash are not money transmitters, a view that aligns with previous Treasury Department interpretations.
Senators Ron Wyden (D-Ore.) and Cynthia Lummis (R-Wyo.) have questioned Attorney General Merrick Garland about the DOJ's 'unprecedented interpretation' of the law, which treats cryptocurrency software services as unlicensed money-transmitting businesses. The senators have expressed concern over the DOJ's approach against firms such as Samourai Wallet and Tornado Cash. They point out that the Treasury Department's Financial Crimes Enforcement Network (FinCEN) has previously held that non-custodial crypto services should not be treated as money transmitters.
Wyden voiced his concern that the DOJ's interpretation could criminalize software developers for merely writing and publishing code used by others. He warned that this could set a dangerous precedent that contradicts decades of settled law and raises serious First Amendment concerns. The senators' letter, dated May 9, argued that subjecting developers of non-custodial crypto asset software to potential criminal liability as unregistered money transmitters contradicts the well-established interpretation of this provision.
The DOJ has also argued in a court filing that FinCEN's guidance on crypto mixers did not address the concept of 'control.' The senators' letter disagreed with this stance, stating that the rule does require the service to take control of the funds to be treated as a transmitter. Lummis argued that wallet software is no more to blame for illicit finance than a highway is responsible for a bank robber's getaway car.
Meanwhile, Congress is grappling with digital assets legislation that would establish comprehensive U.S. rules for the industry, including addressing money-laundering protections. However, the likelihood of wide-ranging legislation becoming law this year is minimal, leaving federal authorities to work under existing law in the meantime.