A pair of senators have written a letter to the Department of Justice, challenging the Financial Crimes Enforcement Network's (FinCEN) “unprecedented interpretation” of the rules used to prosecute cryptocurrency mixers.
Senators Cynthia Lummis (R-Wyo.) and Ron Wyden (D-Ore.) have filed a petition with US Attorney General Merrick Garland and the Department of Justice (DOJ) regarding the ongoing crackdown on cryptocurrency mixers that allegedly act as illegal money transmitters.
Senator Wyden stressed that holding non-custodial crypto asset software developers liable for the supposed criminal activity raised would violate the First Amendment and upset years of legal precedent.
The issue stems from the view of the Financial Crimes Enforcement Network (FinCEN) that any cryptocurrency mixers or services that allow asset transactions meet the requirements of a money transmitter and would therefore be subject to registration with the authorities.
Both senators argued that FinCEN's latest view, as affirmed in last month's filing, is in direct conflict with the actual meaning of this law. According to a bipartisan letter dated May 9 and unveiled May 13, the service must exercise control over assets to qualify as a money transmitter under the provision.
“The wallet software is no longer responsible for illicit financing any more than a highway is responsible for a bank robber's getaway car.”
Senator Cynthia Loomis
The war on cryptocurrency and digital asset mixers
Senators Lummis and Wyden have questioned the Justice Department's methods through FinCEN in the wake of cases against cryptocurrency mixers like Samourai Wallet and Tornado Cash. Five founders credited with developing the platforms have been arrested or are awaiting a ruling in their court cases.
Industry advocates insist that creators should not be held liable for criminal use of their software, noting that blaming an individual for writing lines of code can hinder innovation and technological progress.
Some participants in the chain also felt that users were left dry due to the lack of clear policies for digital assets in the United States. Several bills in Congress seek to address these concerns, but experts are skeptical that a concrete decision on concrete legislation can be made during an election year.