Senators Cynthia Lummis and Ron Wyden have written a letter to Attorney General Merrick Garland expressing their concerns about the Justice Department’s interpretation of money transmission licensing. The senators are particularly concerned about the case against Roman Storm, the co-founder of crypto mixer Tornado Cash, who has been charged with operating an unlicensed money transmission operation and other serious crimes.
According to the Bank Secrecy Act and the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), money transmission is defined as the acceptance and transmission of currency and other forms of value. The senators argue that noncustodial crypto service providers do not meet this definition, and therefore the DOJ’s interpretation contradicts the Treasury’s stance, causing confusion in policy enforcement.
In their letter, Senators Lummis and Wyden highlight that FinCEN is the primary authority when it comes to interpreting money transmission registration requirements. They argue that the DOJ’s proposed standard could be applied to a wide range of services, including internet service providers and the post office, which process bank transfers.
In April, several crypto advocacy groups filed a joint amicus brief with the Southern New York District Court, making a similar argument against the DOJ’s interpretation.
Storm’s lawyers filed a motion to dismiss the charges against him in March, claiming that Tornado Cash does not meet the definition of a money transmission business. They also argued that Storm had no control over sanctioned groups using the service due to its “immutable” nature.
Prosecutors countered by holding Storm accountable for operating the service and alleging that he designed software to facilitate criminal activities. They claimed that Tornado Cash was involved in the transportation and transmission of funds derived from criminal offenses.
Storm was arrested in August on charges of sanctions violations, facilitating money laundering, and unlicensed money transmission. If convicted, he could face up to 45 years in prison. Storm has pleaded not guilty to the charges and is currently out on a $2-million bail with travel restrictions.
In related news, there is a race among developers to build safe and legal coin mixers, with Tornado Cash 2.0 being one of the contenders.