People in the cryptocurrency business are speaking out against what they see as the U.S. Department of Justice’s (DOJ) overly broad interpretation of laws about sending money. 34 crypto companies and advocacy groups have asked Congress to step in, saying that the DOJ’s position makes the law uncertain and makes the setting unwelcoming for blockchain developers. The controversy started when the DOJ used this meaning to charge the creators of the cryptocurrency mixer Tornado Cash with a crime. This made people worry that all blockchain developers could be charged with a crime.
Crypto Firms Challenge DOJ’s Broad Definition
The letter was sent to critical congressional committees. It was led by the DeFi Education Fund and had signatures from big names in the business, such as Kraken and Coinbase. The group says that the DOJ’s view of money-transfer rules is unique and could hurt software development in the digital asset market. The letter says that the DOJ first made its position known in August 2023, when it charged Roman Storm and Roman Semenov, the creators of Tornado Cash, with money laundering.
Conflicting DOJ/FinCEN Guidelines
The crypto alliance shows that the DOJ and the Financial Crimes Enforcement Network (FinCEN) are not working together as they should. Title 31 Section 5330 and Title 18 Section 1960 of the U.S. Code say that software developers who don’t have control over customer funds are not money transmitters. This is what FinCEN’s 2019 advice said. However, the DOJ hasn’t paid attention to this advice because they say Section 5330 doesn’t matter when figuring out unlicensed money transfers under Section 1960.
Software Development Criminalisation Concerns
The letter says the DOJ’s position could leave non-custodial software developers open to criminal charges. The crypto industry says this lack of clarity in the law stops innovation and growth in the U.S., which could send blockchain and DeFi projects overseas. Fear of going to jail has already led to legal action.
Conclusion
If no one challenges it, the DOJ’s view could hurt the U.S. crypto business by discouraging developers from working on blockchain technologies. The crypto coalition wants Congress to step in and ensure that rules are clear and money-transfer laws don’t unfairly target software developers.
