Crypto firms urge Congress to amend DOJ money-transmitting rule

A coalition of 34 crypto firms and advocacy groups has urged Congress to challenge the Department of Justice’s interpretation of money-transmitting laws, arguing it could criminalise blockchain developers.

The DeFi Education Fund-led group sent a letter on March 26 warning that the DOJ’s stance—used to charge Tornado Cash (CRYPTO:TORN) developers Roman Storm and Roman Semenov—blurs the line between software development and money laundering.

The DOJ’s August 2023 indictment of Storm and Semenov under Title 18 Section 1960 diverges from FinCEN’s 2019 guidance, which exempts developers who do not control user funds.

The coalition argued that the DOJ conflates this law with licensing rules under Title 31 Section 5330, creating legal uncertainty.

Storm has pleaded not guilty and seeks to have the charges dismissed, while Semenov remains at large.

Similar charges were filed against Samourai Wallet co-founders Keonne Rodriguez and William Lonergan Hill, who also deny wrongdoing.

The letter also referenced a lawsuit by Michael Lewellen against Attorney General Merrick Garland, challenging the DOJ’s application of money-transmitting laws to non-custodial software.

The coalition warned that failing to clarify the law could stifle blockchain innovation in the U.S., urging Congress to establish clear protections for developers who do not handle user funds.

The DOJ’s focus on privacy tools like Tornado Cash has drawn criticism, with advocates arguing that its approach could have broader consequences for blockchain development.

The letter concluded that the conflicting interpretations of “money transmission” between U.S. agencies create an unfair legal environment for industry participants.