Tornado Cash

Tornado

United States Senators Cynthia Lummis and Ron Wyden have sent a letter to Attorney General Merrick Garland voicing their concern over the Justice Department’s (DOJ’) interpretation of money transmission licensing.&nbsp;
As the bipartisan authors indicate in a footnote, this interpretation is being applied in the case against Roman Storm, co-founder of crypto mixer Tornado Cash, who has been charged with operating an unlicensed money transmission operation and other serious crimes.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-05/926b7d70-21b3-4081-b7b7-958b11f43a78.png" alt="" title="">
 <figcaption style="text-align: center;">Sens. Lummis and Wyden's letter to the attorney general. Source: Senator Cynthia Lummis on X
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The Bank Secrecy Act and the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) clearly define money transmission as the acceptance and transmission of currency and other forms of value. Non-custodial crypto service providers do not meet the established definition of money transmitters, and the DOJ is thus acting contrary to the Treasury, muddying policy enforcement, the senators said. In their words:
<blockquote>
 “Bitcoins have a clear unilateral owner at all times. At no point in the [transfer] transaction process is there uncertainty over where ownership resides. […] Custody and control are, therefore, the logical touchstone of where ‘acceptance and transmission’ occurs on Bitcoin and other crypto networks.”
</blockquote>
FinCen is the “primary interpretive authority” of money transmission registration requirements. The standard suggested by the DOJ could be applied to a broad range of services, from internet service providers that process bank transfers to the post office, the senators <a href="https://twitter.com/SenLummis/status/1790050111575277833" target="_blank" rel="noopener noreferrer nofollow">wrote</a>.
Crypto advocacy groups <a href="https://cointelegraph.com/news/blockchain-association-amicus-brief-tornado-cash" rel="noopener noreferrer nofollow">filed a joint amicus brief</a> in April with the Southern New York District Court making a similar argument.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-05/4bf2d023-daf2-4338-bb49-a86d322e31da.png" alt="" title="">
 <figcaption style="text-align: center;">Source: Senator Cynthia Lummis
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Lawyers for Storm <a href="https://cointelegraph.com/news/tornado-cash-roman-storm-dismiss-charges-money-laundering" rel="noopener noreferrer nofollow">filed a motion to dismiss</a> the charges against him in March, saying Tornado Cash did not meet the definition of a money transmission business and Storm was unable to prevent sanctioned groups from using the service because it was “immutable.”
Related:&nbsp;<a href="https://cointelegraph.com/news/us-doj-tornado-cash-arguments-disdain-privacy-dismissal-case" rel="noopener noreferrer nofollow">DOJ’s Tornado Cash arguments show ‘obvious disdain for privacy’ — Lawyer</a>
Prosecutors countered that Storm <a href="https://cointelegraph.com/news/doj-challenges-motion-to-dismiss-tornado-cash-co-founder-s-charges" rel="noopener noreferrer nofollow">was accountable for operating</a> the service and claimed he designed software to aid criminality. They <a href="https://storage.courtlistener.com/recap/gov.uscourts.nysd.604938/gov.uscourts.nysd.604938.53.0.pdf" target="_blank" rel="noopener noreferrer nofollow">said</a> Tornado Cash was “involved the transportation and transmission of funds known to the defendant to have been derived from a criminal offense.”
Storm was arrested in August on charges of sanctions violations and facilitating money laundering in addition to unlicensed money transmission. He <a href="https://cointelegraph.com/news/tornado-cash-co-founders-charged-with-money-laundering-sanctions-violations-ofac" rel="noopener noreferrer nofollow">could be punished</a> by up to 45 years in prison. He <a href="https://cointelegraph.com/news/tornado-cash-cofounder-pleads-not-guilty" rel="noopener noreferrer nofollow">has pleaded not guilty</a> to the charges and is free on $2 million bail with travel restrictions.
Magazine:&nbsp;<a href="https://cointelegraph.com/magazine/tornado-cash-2-0-the-race-to-build-safe-and-legal-coin-mixers/" rel="noopener noreferrer nofollow">Tornado Cash 2.0: The race to build safe and legal coin mixers</a>

Sens. Lummis, Wyden oppose Justice Dept. stance on Tornado Cash charges

Cointelegraph

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