A coalition of 34 crypto industrial organizations has sent a joint letter to congress leaders who encourage them to tackle the “unprecedented and overly vast” interpretation of the Ministry of Justice of the federal status with regard to non -licensed money transfer.
The letter signed by companies such as Coinbase, Kraken, Uniswap Labs, Ledger, Consensys, Paradigm and the Defi Education Fund, focuses on the recent application of the DOJ of 18 USC §1960 for software developers.
The interpretation of the DOJ first emerged in the criminal indictment against the criminal indictment of Tornado -Contant developer Roman Storm. Public Prosecutors accused the open-source developer on the basis of section 1960, who criminalizes the operation of ‘money without a permit’.
According to the signatories, this meant a deviation from a prolonged understanding of the law and derogether from guidelines issued by the Financial Crimes Enforcement Network (FINCEN), the American Treasury Bureau that the Bank Secrecy Act (BSA) has to enforce.
Doj -interpretation conflicts with Fincen -Guidance
In the center of the dispute is the legal definition of ‘money shipping companies’, which appears in 31 USC §5330, which regulates the licenses under the BSA, and 18 USC §1960, which operates without such a permit.
Both articles of association define money transmission as the transfer of funds “on behalf of the public through all means”, and the guidelines of FINCEN 2019 states that non-venience animal software developers who never have or control over user funds do not fall under this category.
The letter argued that the DOJ ignores these guidelines and claims that the definition of §5330 of a money transport company is not relevant when interpreting section 1960.
This creates conflicting standards between Fincen and the DOJ and the places of developers with a legal risk for publishing or maintaining non-complaining blockchain applications.
In addition, developers who build Defi applications, non-displayed portfolios and other blockchain-based tools can be subjected to a prosecution of crimes, even though they have no control over the assets of users.
They emphasize that the transfer of funds “on behalf of” another party actually requires possession and control over the funds in question. Without that guardianship element, the activity may not be a transfer of money.
The organizations warn that, unless the DOJ reverses its attitude or congress, the result can be a horrifying effect on the development of open source in the US, because developers can prevent developers from being able to interpret code that can be interpreted as a facilitating money transfer.
The letter then concludes by calling in the congress to “encourage the Doj to correct his wrong application of the law and to clarify section 1960 to convey the intention of the congress more clearly.”