Crypto urges Congress to change DOJ rule used against Tornado Cash devs

Published

3 days ago

March 27, 2025

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Crypto urges Congress to change DOJ rule used against Tornado Cash devs

A coalition of crypto firms has urged Congress to press the Department of Justice to amend an “unprecedented and overly expansive” interpretation of laws that were used to charge the developers of the crypto mixer Tornado Cash.

A March 26 letter signed by 34 crypto companies and advocate groups sent to the Senate Banking Committee, House Financial Services Committee and the House and Senate judiciary committees said the DOJ’s take on unlicensed money-transmitting business means “essentially every blockchain developer could be prosecuted as a criminal.”

The letter — led by the DeFi Education Fund and signed by the likes of Kraken and Coinbase — added that the Justice Department’s interpretation “creates confusion and ambiguity” and “threatens the viability of U.S.-based software development in the digital asset industry.”

The group said the DOJ debuted its position “in August 2023 via criminal indictment” — the same time it charged Tornado Cash developers Roman Storm and Roman Semenov with money laundering.

Storm has been released on bail, has pleaded not guilty and wants the charges dropped. Semenov, a Russian national, is at large.

The DOJ has filed similar charges against Samourai Wallet co-founders Keonne Rodriguez and William Lonergan Hill, who have both pleaded not guilty.

The crypto group’s letter argued that two sections of the US Code define a “money transmitting business” — Title 31 section 5330, defining who must be licensed and Title 18 section 1960, which criminalizes operating unlicensed.

It added that 2019 guidance from the Treasury’s Financial Crimes Enforcement Network (FinCEN) gave examples of what money-transmitting activities and said that “if a software developer never obtains possession or control over customer funds, that developer is not operating a ‘money transmitting business.’”

The letter argued that the DOJ had taken a position that the definition of a money transmitting business under section 5330 “is not relevant to determining whether someone is operating an unlicensed ‘money transmitting business’ under Section 1960” despite the “intentional similarity” in both sections and FinCEN’s guidance.

The group accused the DOJ of ignoring both FinCEN’s guidance and parts of the law to pursue its own interpretation of a money-transmitting business when it charged Storm and Semenov.

They said the result had seen “two separate US government agencies with conflicting interpretations of ‘money transmission’ — an unclear, unfair position for law-abiding industry participants and innovators.”

The letter said that if not addressed, the Justice Department’s interpretation would expose non-custodial software developers “within the reach of the U.S. to criminal liability.”

“The resulting, and very rational, fear among developers would effectively end the development of these technologies in the United States.”

In January, Michael Lewellen, a fellow of the crypto advocacy group Coin Center, sued Attorney General Merrick Garland to have his planned release of non-custodial software declared legal and to block the DOJ from using money transmitting laws to prosecute him.

Lewellen said the DOJ “has begun criminally prosecuting people for publishing similar cryptocurrency software,” which he claims extended the interpretation of money-transmitting laws “beyond what the Constitution allows.”

Magazine: Meet lawyer Max Burwick — ‘The ambulance chaser of crypto’

Politics

Stablecoin rules needed in US before crypto tax reform, experts say

Published

3 hours ago

March 30, 2025

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Stablecoin rules needed in US before crypto tax reform, experts say

United States cryptocurrency regulations need more clarity on stablecoins and banking relationships before lawmakers prioritize tax reform, according to industry leaders and legal experts.

“In my view, tax isn’t necessarily the priority for upgrading US crypto regulation,” according to Mattan Erder, general counsel at layer-3 decentralized blockchain network Orbs.

A “tailored regulatory approach” for areas including securities laws and removing “obstacles in banking” is a priority for US lawmakers with “more upside” for the industry, Erder told Cointelegraph.

“The new Trump administration is clearly all in on crypto and is taking steps that we could have only dreamed about a few years ago (including during his first term),” he said. “It seems likely that crypto regulation will be able to have it all and get much more clear and rational regulation in all areas, including tax.”

Still, Erder noted there are limits to what President Donald Trump can accomplish through executive orders and regulatory agency action alone. “At some point, the laws themselves will need to change, and for that, he will need Congress,” he said.

Trump’s March 7 executive order, which directed the government to establish a national Bitcoin reserve using crypto assets seized in criminal cases, was seen as a signal of growing federal support for digital assets.

Debanking concerns remain

Despite the administration’s recent pro-crypto moves, industry experts say crypto firms may continue to face difficulties with banking access until at least January 2026.

“It’s premature to say that debanking is over,” as “Trump won’t have the ability to appoint a new Fed governor until January,” Caitlin Long, founder and CEO of Custodia Bank, said during Cointelegraph’s Chainreaction daily X show.

The Crypto Debanking Crisis: #CHAINREACTION https://t.co/nD4qkkzKnB

— Cointelegraph (@Cointelegraph) March 21, 2025

Industry outrage over alleged debanking reached a crescendo when a June 2024 lawsuit spearheaded by Coinbase resulted in the release of letters showing US banking regulators asked certain financial institutions to “pause” crypto banking activities.

Stablecoin legislation could unlock new growth

David Pakman, managing partner at crypto investment firm CoinFund, said a stablecoin regulatory framework could encourage more traditional finance institutions to adopt blockchain-based payments.

“Some of the potentially soon-to-pass legislation in the US, like the stablecoin bill, will unlock many of the traditional banks, financial services and payment companies onto crypto rails,” Pakman said during Cointelegraph’s Chainreaction live X show on March 27.

“We hear this firsthand when we talk to them; they want to use crypto rails as a lower-cost, transparent, 24/7, and no middleman-dependent network for transferring money.”

The comments come as the industry awaits progress on US stablecoin legislation, which may come as soon as in the next two months, according to Bo Hines, the executive director of the president’s Council of Advisers on Digital Assets.

The GENIUS Act, an acronym for Guiding and Establishing National Innovation for US Stablecoins, would establish collateralization guidelines for stablecoin issuers while requiring full compliance with Anti-Money Laundering laws.

Magazine: SEC’s U-turn on crypto leaves key questions unanswered

Politics

Gig economy bosses could face jail time if they fail to check employers can legally work in UK

Published

11 hours ago

March 30, 2025

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Gig economy bosses could face jail time if they fail to check employers can legally work in UK

Company bosses hiring in the gig economy could face up to five years in prison if they fail to check if their employees can legally work in the UK, the Home Office has said.

The employers could also be banned from operating as company directors, have their business closed down, or be hit with fines of up to £60,000 for every worker who isn’t checked as part of the government crackdown.

The announcement comes as Home Secretary Yvette Cooper prepares to speak to Sky News breakfast show Sunday Morning with Trevor Phillips today.

Her department has said “thousands” of companies which hire gig economy and zero-hour contract workers are not legally required to check whether they have the right to work in the UK.

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The gig economy refers to an employment arrangement where work is assigned on a short-term or job-by-job basis in sectors such as construction, food delivery, beauty salons and courier services.

Food delivery firms Deliveroo, Just Eat and Uber Eats all use this approach to employment.

However, all three of those employers already voluntarily carry out checks to ensure their delivery riders are eligible to work in the UK.

The Home Office has now announced that all employers who hire gig economy or zero-hour contract workers will have to carry out these “vital checks” which take “just minutes to complete”.

This amendment to the Border Security, Asylum and Immigration Bill will help “level the playing field for the majority of honest companies who do the right thing”, the government department added.

The Home Office said it will provide the checks free of charge and that “clamping down” on illegal working forms a “critical part of the government’s plan to strengthen the entire immigration system”.

The move is also intended to “undermine people smugglers using the false promise of jobs for migrants”, it added.

Ms Cooper said: “Turning a blind eye to illegal working plays into the hands of callous people smugglers trying to sell spaces on flimsy, overcrowded boats with the promise of work and a life in the UK.

“These exploitative practices are often an attempt to undercut competitors who are doing the right thing. But we are clear that the rules need to be respected and enforced.”

Meanwhile the government is preparing to host the first international summit in the UK on how to tackle people-smuggling gangs.

Ministers and enforcement staff from 40 countries will meet in London on Monday and Tuesday to discuss international cooperation, supply routes, criminal finances and online adverts for dangerous journeys.

Countries including Albania, Vietnam and Iraq – where migrants have travelled from to the UK – will join the talks as well as France, the US and China.

The government will also hand counter-terror style powers to police and enforcement agencies to crack down on people-smuggling gangs as part of amendments to the bill.

Politics

Bitcoin adoption in EU limited by ‘fragmented’ regulations — Analysts

Published

24 hours ago

March 29, 2025

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Bitcoin adoption in EU limited by ‘fragmented’ regulations — Analysts

Institutional adoption of Bitcoin in the European Union remains sluggish, even as the United States moves forward with landmark cryptocurrency regulations that seek to establish BTC as a national reserve asset.

More than three weeks after President Donald Trump’s March 7 executive order outlined plans to use cryptocurrency seized in criminal cases to create a federal Bitcoin (BTC) reserve, European companies have largely remained silent on the issue.

The stagnation may stem from Europe’s complex regulatory regime, according to Elisenda Fabrega, general counsel at Brickken, a European real-world asset (RWA) tokenization platform.

“European corporate adoption remains limited,” Fabrega told Cointelegraph, adding:

“This hesitation reflects a deeper structural divide, rooted in regulation, institutional signaling and market maturity. Europe has yet to take a definitive stance on Bitcoin as a reserve asset.”

Bitcoin’s economic model favors early adopters, which may pressure more investment firms to consider gaining exposure to BTC. The asset has outperformed most major global assets since Trump’s election despite a recent correction.

Despite Trump’s executive order, only a small number of European companies have publicly disclosed Bitcoin holdings or crypto services. These include French banking giant BNP Paribas, Swiss firm 21Shares AG, VanEck Europe, Malta-based Jacobi Asset Management and Austrian fintech firm Bitpanda.

A recent Bitpanda survey suggests that European financial institutions may be underestimating crypto investor demand by as much as 30%.

Europe’s “fragmented” regulatory landscape lacks clarity

The EU’s slower adoption appears tied to its patchwork of regulations and more conservative investment mandates, analysts at Bitfinex told Cointelegraph. “Europe’s institutional landscape is more fragmented, with regulatory hurdles and conservative investment mandates limiting Bitcoin allocations.”

“Additionally, European pension funds and large asset managers have been slower to adopt Bitcoin exposure due to unclear guidelines and risk aversion,” they added.

Beyond the fragmented regulations, European retail investor appetite and retail participation are generally lower than in the US, according to Iliya Kalchev, dispatch analyst at digital asset investment platform Nexo.

Europe is “generally more conservative in adopting new financial instruments,” the analyst told Cointelegraph, adding:

“This stands in stark contrast to the deep, liquid, and relatively unified US capital market, where the spot Bitcoin ETF rollout was buoyed by strong retail demand and a clear regulatory green light.”

BlackRock, the world’s largest asset manager, launched a Bitcoin exchange-traded product (ETP) in Europe on March 25, a development that may boost institutional confidence among European investors.