A coalition of 34 crypto corporations and advocacy teams is urging Congress to push again in opposition to what they name an “unprecedented and overly expansive” authorized interpretation utilized by the US Division of Justice (DOJ) in its case in opposition to the builders of crypto mixer Tornado Cash.
In a letter dated March 26, the group—led by the DeFi Schooling Fund and co-signed by main trade gamers together with Coinbase and Kraken—warned lawmakers that the DOJ’s present stance may criminalize practically all blockchain software program builders.
The letter was despatched to key committees in each the Home and Senate, together with the Senate Banking Committee and Home Monetary Providers Committee.
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DOJ’s Tornado Cash Case Threatens US Crypto Growth, Trade Coalition Warns
The coalition argues that the DOJ’s authorized technique, first launched in its August 2023 indictment of Tornado Cash builders Roman Storm and Roman Semenov, poses a menace to the complete digital asset growth ecosystem in america.
Storm, who has pleaded not responsible and is presently out on bail, is looking for to have the fees dismissed. Semenov, a Russian nationwide, stays at massive.
The DOJ has filed related fees in opposition to the founders of Samourai Pockets, who additionally face cash laundering allegations and have pleaded not responsible.
Central to the coalition’s criticism is the DOJ’s interpretation of what constitutes a “money transmitting business.” The letter factors to 2 U.S. authorized codes—Title 31 Part 5330 and Title 18 Part 1960—that outline and criminalize unlicensed cash transmission.
It additionally references 2019 steering from the Monetary Crimes Enforcement Community (FinCEN), which clarified that software program builders who don’t management consumer funds will not be thought-about cash transmitters.
NEW: At the moment, the DeFi Schooling Fund is proud to publish a coalition letter of trade leaders & advocates calling on Congress to right, what in our collective view, is the DOJ’s harmful misinterpretation of cash transmission legal guidelines.
A thread
pic.twitter.com/AqhHDCjGc3
— DeFi Schooling Fund (@fund_defi) March 26, 2025
Nonetheless, the DOJ seems to have dismissed these distinctions, making use of its personal interpretation to construct circumstances in opposition to non-custodial builders.
The outcome, the coalition claims, is a authorized contradiction between FinCEN and the DOJ, which places builders in an unsure and doubtlessly perilous place.
“If left unaddressed, the DOJ’s approach could extend criminal liability to software developers who never handle customer funds,” the letter warned. “This would significantly chill innovation and development in the U.S.”
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U.S. Treasury: No Remaining Ruling Wanted After Tornado Cash Faraway from Sanctions Listing
Earlier this week, the U.S. Treasury Division acknowledged that no additional courtroom motion is required within the ongoing lawsuit over its 2022 sanctions on crypto mixer Tornado Cash.
The Treasury’s Workplace of Overseas Property Management (OFAC) initially blacklisted the platform, alleging it was utilized by North Korea’s Lazarus Group to launder illicit funds. In response, six customers, backed by Coinbase, sued the division, claiming the sanctions have been illegal.
On March 21, the Treasury eliminated Tornado Cash and its associated sensible contracts from the sanctions listing, asserting in a courtroom submitting that the case is now moot.
Nonetheless, Coinbase’s Chief Legal Officer, Paul Grewal, disagreed, arguing that delisting the platform doesn’t resolve the authorized query on the coronary heart of the lawsuit.
Energy doesn’t recede voluntarily. It is gasps and it gasps till it now not can. @USTreasury filed one more late Friday pleading in opposition to Tornado Cash. After grudgingly delisting TC, they now declare they’ve mooted any want for a last courtroom judgment. However that is not the regulation,… pic.twitter.com/Je8KD51X0q
— paulgrewal.eth (@iampaulgrewal) March 23, 2025
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Key Takeaways
- A coalition of 34 crypto corporations is urging Congress to oppose the DOJ’s interpretation of cash transmission legal guidelines used within the Tornado Cash case.
- The group argues the DOJ’s stance may criminalize non-custodial software program builders and threaten blockchain innovation within the US
- Regardless of the Treasury eradicating Tornado Cash from the sanctions listing, Coinbase insists the authorized points on the core of the case stay unresolved.
The publish Crypto Firms Urge Congress to Challenge DOJ’s Broad Legal Case Against Tornado Cash Developers appeared first on 99Bitcoins.
