Bipartisan Senators probe FinCEN crypto mixer lawsuits

A
pair
of
Senators
wrote
a
letter
to
the
Department
of
Justice,
challenging
FinCEN’s
“unprecedented
interpretation”
of
rules
used
to
sue
crypto
mixers.

Senators
Cynthia
Lummis
(R-Wyo.)
and
Ron
Wyden
(D-Ore.)
petitioned
U.S.
Attorney
General
Merrick
Garland
and
the
Department
of
Justice
(DOJ)
regarding
an
ongoing
crackdown
on
crypto
mixers
allegedly
operating
as
illegal
money
transmitters. 

Sen.
Wyden
stressed
that
holding
non-custodial
crypto
asset
software
developers
liable
for
supposed
criminal
activity
raised
may
violate
the
First
Amendment
and
upset
years
of
lawful
precedent. 

The
issue
stems
from
the
Financial
Crimes
Enforcement
Network
(FinCEN)

view
that
any
crypto
mixers
or
services
allowing
asset
transactions
satisfy
the
requirement
of
a
money
transmitter
and
would
thus
be
subject
to
registration
with
authorities.

Both
Senators
argued
that
FinCEN’s
latest
view,
as
confirmed
in
a
filing
last
month,
directly
contradicted
this
law’s
actual
meaning. According
to
a
bipartisan
letter
dated
May
9
and
disclosed
on
May
13,
a
service
must
exercise
control
of
the
assets
to
qualify
as
a
money
transmitter
under
this
provision. 

“Wallet
software
is
no
more
to
blame
for
illicit
finance
than
a
highway
is
responsible
for
a
bank
robber’s
getaway
car.”

Senator

Cynthia
Lummis

War
on
crypto
mixers,
digital
assets

Senators
Lummis
and
Wyden
have
questioned
the
DOJ’s
methods
through
FinCEN
following
cases
against
crypto
mixers
like

Samourai
Wallet
and

Tornado
Cash.
Five
founders
credited
with
developing
the
platforms
have
either
been
arrested
or
await
a
verdict
in
their
respective
court
cases. 

Industry
proponents
insist
that
builders
should
not
be
held
responsible
for
the
criminal
use
of
their
software,
noting
that
blaming
an
individual
for
writing
lines
of
code
could
stunt
innovation
and
technological
advancement. 

Some
on-chain
participants
also
opined
that
users
have
been
left
out
to
dry
due
to
a
lack
of
clear
digital
assets
policies
in
the
United
States.
Several
bills
in
Congress
seek
to
address
these
concerns
but
experts
are
doubtful
that
concrete
legislation
will
be
decided
during
an
election
year.