US Senators Question DOJ’s Interpretation of Money Transmission Licensing in Crypto Case
Summary:
US Senators Cynthia Lummis and Ron Wyden have written to Attorney General Merrick Garland, expressing concern over the Justice Department's interpretation of money transmission licensing, notably its application in the case against Roman Storm, co-founder of Tornado Cash. They believe that non-custodial cryptocurrency service providers do not fit the definition of money transmitters, leading to ambiguity in policy enforcement. Storm, who was arrested in August, faces charges including sanctions violations and facilitating money laundering, and could serve up to 45 years in prison if convicted.
Senators Cynthia Lummis and Ron Wyden of the United States have communicated with Attorney General Merrick Garland through a letter, expressing their worries about the Justice Department's application of money transmission licensing. They specifically mention this in relation to the ongoing legal case against Roman Storm, the co-founder of cryptocurrency mixer Tornado Cash. Storm is facing criminal charges for running an unregistered money transmission operation, among other serious allegations.
The interpretation mentioned refers to the Bank Secrecy Act and the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) outlining money transmission as the acceptance and transfer of currency as well as other valuable mediums. According to the Senators, non-custodial cryptocurrency service providers fail to meet this precise definition of money transmitters. They opine that the Justice Department's present interpretation contradicts the Treasury's guidelines, creating an ambiguity in policy enforcement.
They further argue that the ownership of Bitcoins is always certain and unchanged. In any transaction, it's clear who the owner of the Bitcoin is. Thus, they suggest that the actual determination of 'acceptance and transmission' lies in the custody and control aspects of Bitcoin and similar cryptocurrency networks.
They also state that FinCen holds the foremost authority in interpreting registration requirements for money transmission. They caution that the line of reasoning put forth by the Justice Department could potentially be imposed on various services like internet service providers processing bank transfers or even postal services.
Back in April, crypto advocacy groups presented a united front to object to this interpretation when they filed a mutual amicus brief in the Southern New York District Court.
Storm's legal team requested for the allegations against their client to be dismissed in March, arguing that Tornado Cash does not qualify as a money transmission enterprise. They also insisted that Storm could not have prevented sanctioned groups from availing the service given its immutability.
The prosecution, however, maintained that Storm bore the responsibility for the operation of the service and has even developed software for nefarious purposes. They argued that Storm knowingly facilitated the transfer and transport of funds derived from criminal activity through Tornado Cash.
Storm was arrested in August and faces charges including breaching sanctions, abetting money laundering, and unlicensed money transmission. If convicted, he could serve up to 45 years in prison. He denies the charges and was released on a $2 million bail, albeit with travel constraints.
Published At
5/13/2024 10:29:03 PM
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