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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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.
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