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Senator Lummis Vows to Protect Bitcoin Against DOJ Overreach

Senator Cynthia Lummis criticizes DOJ's stance on Bitcoin wallets, warning of legal overreach and threats to property rights in crypto.
Senator Lummis Vows to Protect Bitcoin Against DOJ Overreach

Highlights

  • Sen. Lummis criticizes DOJ for misinterpreting crypto wallet regulations.
  • Coin Center argues DOJ's stance may classify all crypto wallets as money transmitters.
  • DOJ's view could force crypto developers to obtain financial licenses.

U.S. Senator Cynthia Lummis has criticized the Department of Justice (DOJ) for its recent interpretation of regulations surrounding non-custodial software wallets. In the view of Senator Lummis, the DOJ’s method is inconsistent with the past advice provided by the Treasury, which considers such wallets as means of potential money transmissions. This contradiction, she believes, may result in the break of the rule of law by criminalizing the core elements of the operation of Bitcoin and decentralized finance.

The senator’s objections were precipitated by the DOJ’s filing of criminal charges against developers tied to the Bitcoin mixer Samourai Wallet and the Tornado Cash platform. The Department of Justice, however, has always considered the creation and maintenance of these platforms unauthorized money transmission activities. 

Lummis’ reply has been to defend that such interpretations pose risks to basic property rights, which are the very essence of American values, accenting the people’s right to “hold your own keys and run your own node.”

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Reaction from the Bitcoin Community and Legal Experts

The DOJ’s position has attracted a strong response not only from politicians like Senator Lummis but also from a variety of entities in the cryptocurrency community. According to Coin Center, a digital currency and blockchain technology advocacy group, the DOJ’s position is overreaching. 

Peter Van Valkenburgh, Coin Center’s director of research, expressed worries that this interpretation may suggest that “every functional cryptocurrency wallet and smart contract is performing money transmission,” which he maintains extends the scope of the definition of money transmission too broadly.

Coin Center has also moved to challenge these legal interpretations by submitting an amicus brief in favor of Roman Storm, the developer of Tornado Cash. They, in fact, entirely argue that what Storm actually did, i.e., code publishing, has to be protected by the First Amendment, thus focusing on the freedom of speech principle.

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Potential Consequences for Software Developers

The consequences of the DOJ’s understanding go far beyond specific cases and are also related to some other crucial issues in the field of the cryptocurrency industry, including the relation of software developers. 

If developers are classified as money transmitters for the development and distribution of technology that enables digital transactions, it sets a standard that would require all developers to be licensed as financial operators. This situation could suppress innovation and discourage activity in the cryptocurrency world because of greater regulatory requirements.

In addition, such an extensive use of money transmission laws may result in many operational changes within the crypto industry. Developers need to implement identity verification processes or even limit services to avoid regulatory breaches, fundamentally altering the decentralized and open nature of current blockchain technologies.

Read Also: Crypto In Spotlight as UK FCA Unveils Money Laundering Report

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Kelvin Munene Murithi

Kelvin Munene is a crypto and finance journalist with over 5 years of experience, offering in-depth market analysis and expert commentary . With a Bachelor's degree in Journalism and Actuarial Science from Mount Kenya University, Kelvin is known for his meticulous research and strong writing skills, particularly in cryptocurrency, blockchain, and financial markets. His work has been featured across top industry publications such as Coingape, Cryptobasic, MetaNews, Cryptotimes, Coinedition, TheCoinrepublic, Cryptotale, and Analytics Insight among others, where he consistently provides timely updates and insightful content. Kelvin’s focus lies in uncovering emerging trends in the crypto space, delivering factual and data-driven analyses that help readers make informed decisions. His expertise extends across market cycles, technological innovations, and regulatory shifts that shape the crypto landscape. Beyond his professional achievements, Kelvin has a passion for chess, traveling, and exploring new adventures.

Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
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