A group of 34 crypto firms urged Congress to push the Department of Justice (DOJ) to make ameds to its “unprecedented and overly expansive” interpretation of money-transmitting laws

They sent a signed letter to the Senate Banking Committee, the House Financial Services Committee, and the House and Senate judiciary committees

A group of 34 crypto firms has urged Congress to push the Department of Justice (DOJ) to amend its “unprecedented and overly expansive” interpretation of U.S. money-transmitting laws, which they argue could have devastating consequences for blockchain developers in the country.

In a signed letter sent on March 26, the crypto firms addressed their plea to the Senate Banking Committee, the House Financial Services Committee, and the House and Senate judiciary committees.

The firms’ document focused on the DOJ’s position and interpretation of an unlicensed money-transmitting business, which, according to the crypto firms, could affect “essentially every blockchain developer” in the U.S.

The controversy arose from the DOJ’s decision to charge Tornado Cash developers Roman Storm and Roman Semenov with money laundering in August 2023.

According to the crypto firms, the charges against Storm and Semenov are based on a misinterpretation of federal law and disregard previous regulatory guidance from the Treasury Department’s Financial Crimes Enforcement Network (FinCEN).

Out of the two developers, Storm has pleaded not guilty and is currently out on bail. He is also seeking to have the charges dropped. Meanwhile, Semenov, a Russian national, remains at large.

Earlier this year, the DOJ also filed similar charges against the co-founders of Samourai Wallet, Keonne Rodriguez and William Lonergan Hill, both of whom have pleaded not guilty.

But in a statement announcing the charges against Rodriguez and Hill, the DOJ said that Samourai Wallet, through its products and services, aided individuals in laundering cryptocurrency and evading U.S. sanctions.

However, the crypto firms argue that this stance contradicts FinCEN’s 2019 guidance, which they claim categorized software developers who do not possess and do not control customer funds as not money transmitters.

According to the crypto firms, the DOJ’s stance is threatening to criminalize a vast number of software developers.

“The DOJ’s position, if allowed to stand, would create an interpretation of U.S. law that is broader than the interpretation of comparable foreign jurisdictions, making it very difficult, if not impossible, for U.S. developers to comply with U.S. law while also operating in other major jurisdictions,” the crypto firms wrote in their letter.

They add that U.S. law defines a “money transmitting business” under two sections of the U.S. Code:

“[The crypto firms continue:] In 2019, FinCEN issued guidance that clearly stated that software developers who develop, publish, maintain, and update non-custodial software technologies do not fall within FinCEN’s interpretation of money transmitters.

« Despite this clear guidance from FinCEN, and despite the fact that no U.S. agency has ever previously brought an administrative action against a non-custodial software developer, the DOJ has disregarded FinCEN’s interpretation and has chosen to apply a differential copy of U.S. law in order to pursue criminal charges against two software developers—Roman Storm and Roman Semenov—for publishing open-source code for non-custodial software technologies.

“Both of these individuals have now been charged with conspiracy to operate an unlicensed money transmitting business. In the case of Storm, the DOJ chose to pursue this case despite the fact that the Department had previously declined to pursue a similar case against another individual.

“The crypto firms further claim that the DOJ’s interpretation of U.S. money transmitting laws is also problematic because it could have a chilling effect on crypto development in the U.S.

“As the U.S. Congress intended, U.S. administrative agencies are charged with interpreting U.S. law, and lower courts are charged with reviewing the agencies’ interpretations. However, in this instance, the DOJ has disregarded a U.S. administrative agency’s interpretation of U.S. law and has instead chosen to pursue its own interpretation, which no court has ever considered,” the crypto firms said.

According to the crypto firms, this move by the DOJ is especially concerning given the fact that two separate U.S. government agencies have conflicting interpretations of “money transmission,” rendering it very difficult for developers to stay in compliance with U.S. law.

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

This isn't the first time that the DOJ’s stance is facing legal pushback. Earlier this year, Michael Lewellen, a fellow at Coin Center, sued Attorney General Merrick Garland, seeking a legal declaration that his non-custodial crypto software is lawful.

In his lawsuit, Lewellen argues that the DOJ is stretching money-transmitting laws beyond constitutional limits by prosecuting developers who merely publish software.

According to the crypto firms, Congress should step in to clarify the legal landscape for blockchain developers.

If left unaddressed, they