U.S. Senators Question DOJ’s Approach to Crypto Mixer Enforcement

In a bipartisan effort, U.S. Senators Ron Wyden and Cynthia Lummis have raised questions regarding the Department of Justice’s (DOJ) unconventional interpretation of law in targeting cryptocurrency software services as unlicensed money-transmitting businesses.

Senators Wyden and Lummis penned a letter to Attorney General Merrick Garland, expressing concerns over the DOJ’s pursuit of firms like Samourai Wallet and Tornado Cash. They highlighted the contradiction with the Treasury Department’s previous stance, which deemed non-custodial crypto services exempt from money transmitter regulations.

Wyden underscored the potential ramifications, stating, “I’m concerned the DOJ’s interpretation would treat software developers as criminals for merely writing and publishing code used by others – a dangerous precedent that contradicts decades of settled law and raises serious First Amendment concerns.”

Contentious Legal Arguments

The DOJ’s recent targeting of Samourai Wallet drew criticism from the senators, who argued that subjecting developers to criminal liability diverges from established legal interpretations. They challenged the DOJ’s argument in court filings regarding the concept of “control” and its analogy likening wallets to data transfer cables or kitchen utensils.

Contrary to the DOJ’s stance, the senators emphasized that the legal definition of a money transmitter requires the service to take control of the funds.

Senator Lummis equated blaming wallet software for illicit finance to holding a highway responsible for a bank robbery’s getaway car. While Congress deliberates on digital assets legislation, including measures to address money laundering, the outlook for comprehensive regulation this year remains uncertain.

Despite an anticipated House vote on significant bills, comprehensive legislation’s passage appears unlikely, leaving federal authorities to operate within existing legal frameworks for the time being.