Coin Center Sounds Alarm on DOJ's Crypto Crackdown: A Threat to Innovation and Privacy The Department of Justice's recent crackdown on
wallet developers has raised eyebrows in the cryptocurrency community. Despite lacking control over user assets, these developers are now facing
criminal charges for unlicensed money transmission. This shift from regulation to criminal enforcement is a cause for concern, warns Peter Van Valkenburgh from Coin Center.
Since 2013, it has been crystal clear that wallet developers aren't considered
money transmitters by the US government. But the DOJ's new stance challenges this understanding, diverging from the definitions set by regulatory bodies like FinCEN. This sudden change in approach could have far-reaching implications for the crypto industry.
In the ongoing Tornado Cash case, a telling section of the DOJ's reply brief caught Van Valkenburgh's attention. Titled "Section 1960 Does Not Require the Business to Have Control of the Funds," it suggests an expansion of what constitutes an "unlicensed money transmitting business." This potential overreach raises concerns about due process and regulatory boundaries.
It's not just about legal technicalities; it's about our
privacy and fundamental freedoms. The FBI's warning to wallet users about non-regulated entities adds another layer of worry. Van Valkenburgh emphasizes that this assault on personal liberties is nothing short of a "disaster for the rule of law."
The implications go beyond individual cases; they could impact the entire crypto ecosystem. If wallet software is reclassified as money transmitters across the board, regardless of their actual operations, it could stifle innovation and limit users' ability to manage their digital assets independently.
