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US Justice Department has taken legal actions against developers and operators of self-custody cryptocurrency wallets. This development has increased the concerns of Wyoming Republican Senator Cynthia Lummis. The Senator expressed deep discomfort with the Justice Department’s overly aggressive approach to considering “non-custodial software as a money transfer service.” The Department now believes that money transfer laws cover wallet developers who have no custody or control over users’ crypto assets.
Justice Department’s Latest Legal Move on Crypto Wallets
The Justice Department’s latest legal move concerning private crypto wallets accuses Samourai Wallet, a privacy-focused Bitcoin wallet and mixer service, of conducting over $2 billion in “illegal transactions” and operating without a money transfer license.
Founders of the wallet, Keonne Rodriguez and William Lonergan, were arrested in Pennsylvania and Portugal respectively in recent weeks. Rodriguez was released on a $1 million bail but will be under house arrest until the trial.
Another Significant Case Followed by the Department
Crypto world closely follows another significant case involving the Justice Department’s charges against Roman Storm, developer of the crypto mixer tool Tornado Cash. Storm has denied the accusations of money laundering and violating sanctions and has gone to court to dismiss them. However, the Justice Department quickly took steps to block Storm’s request.
The Justice Department argued in its filing that “It is not possible for the defendant to request dismissal of the indictment based on the disputed view of how the Tornado Cash service operates or the intent behind his specific actions.”
Senator Lummis Criticizes Justice Department’s Stance
Lummis stated that the Justice Department’s stance on software regulation is “incompatible with current Treasury guidelines and violates the rule of law.” She also emphasized that this attitude threatens the fundamental property rights of American citizens.
The Wyoming senator expressed concerns about the Biden administration’s accusations against the fundamental principles of the Bitcoin network and decentralized finance (DeFi).
Bad Actors Are Everywhere
Senator Lummis is not speaking for the first time in defense of crypto assets. An important point she previously emphasized was that crypto assets are not the enemy of the government. Instead, she highlighted the presence of “malicious actors,” who are already everywhere.
Lummis stressed the importance of policymakers creating a strong regulatory framework to prevent the exploitation of crypto currencies by malicious actors, while also supporting well-managed solutions to encourage innovations and advancements in this area.
