United States Senators Cynthia Lummis and Ron Wyden have expressed their concern to Attorney General Merrick Garland regarding the Justice Department’s (DOJ) interpretation of money transmission licensing. The senators are troubled by the fact that this interpretation is being applied in the case against Roman Storm, the co-founder of crypto mixer Tornado Cash, who has been charged with running 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 clearly defined as the acceptance and transmission of currency and other forms of value. However, noncustodial crypto service providers do not meet the established definition of money transmitters. The senators argue that the DOJ’s actions contradict the Treasury’s stance, leading to confusion in policy enforcement.
Senators Lummis and Wyden emphasize that FinCEN is the primary authority when it comes to interpreting money transmission registration requirements. They believe that the DOJ’s proposed standard could be applied to a wide range of services, including internet service providers that process bank transfers and even the post office.
In support of their argument, several crypto advocacy groups filed a joint amicus brief with the Southern New York District Court in April.
Storm’s legal team filed a motion in March to dismiss the charges against him. They argue that Tornado Cash does not meet the definition of a money transmission business and that Storm could not prevent sanctioned groups from using the service due to its “immutable” nature.
Prosecutors, on the other hand, hold Storm accountable for operating the service and allege that he designed software to facilitate criminal activity. They claim 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 released on a $2-million bail with travel restrictions.
In related news, there is a race among developers to create safe and legal coin mixers, with the release of Tornado Cash 2.0 being highly anticipated.