Pro-Bitcoin Senator Cynthia Lummis from Wyoming has voiced concern over President Joe Biden’s stance on crypto regulation in the US. Senator Lummis condemned the misinterpretation of FinCEN laws, saying it “threatens to criminalize the core tenets of Bitcoin and other cryptocurrencies.
With Senator Ron Wyden’s support, Lummis escalated the issue of how such misinterpretation could stifle crypto innovation in the United States.
The Deviations in FinCEN Interpretation for Bitcoin and Crypto
Two US senators, Cynthia Lummis and Ron Wyden, have criticized the rising challenge of crypto regulations in the country. In a joint letter addressed to US Attorney General Merrick Garland, the senators highlighted a perceived deviation from the FinCEN laws.
According to the letter, the US Department of Justice (DOJ) incorrectly interprets FinCEN’s money transmission rules.
President Biden’s DOJ steamrolling the longstanding interpretation of FinCEN is legally wrong and threatens to criminalize Bitcoin software development in America. @RonWyden and I have sent a bipartisan letter to DOJ urging it to drop this interpretation immediately. ⬇️ pic.twitter.com/iazbBhMcOv
— Senator Cynthia Lummis (@SenLummis) May 13, 2024
The senators admitted that the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has well-structured regulations. However, the DOJ’s misinterpretation could criminalize the fundamentals of Bitcoin and other crypto networks.
Also, the senators warned that such moves will stifle the innovative aspect of crypto. They believe it would weaken people’s confidence in the rule of law.
A part of the letter reads:
“The Biden administration’s alteration of FinCEN’s interpretation not only strays from legal precedent but also undermines the entrepreneurial spirit that drives America’s global economic prominence.“
Further, the senators elaborated on the place of FinCEN laws in the crypto industry. According to the laws, no registration requirements exist for non-custodian services on money transmission.
Notably, non-custodial services don’t involve any direct receipt or control of digital assets. So, the letter argues that such service providers can’t be under the category of money transmitter businesses.
The senators also explained that Users retain exclusive custody and control over the private keys to their crypto assets. Hence, all transactions are signed and processed without third-party interference on the user’s local device.
Difference Between Wallet Software and Illicit Finance
Additionally, Senator Lummis stressed the importance of differentiating between wallet software and illegal financial transactions. According to the Senator, digital wallets serve as storage and security purses for users.
Lummis rebuffs the assertions that wallets facilitate criminal activities. Thus, she maintained her stance on preserving users’ rights to self-custody of crypto assets.
The senator also reiterated the need to safeguard the right to store private keys in personal wallets. Such practices will boost the growth of the crypto industry and ensure its continuous operation under the law.
Senator Wyden further highlighted the need for law enforcement against the illicit use of digital assets. According to the senator, government agencies should watch out for those indulging in money laundering and tax evasion.
However, he cautioned the agencies to avoid bringing contrasting interpretations of the law in their operations. He noted that such errors could target software developers in the crypto industry.
Wyden said:
“I’m concerned that the DOJ’s interpretation would unjustly categorize software developers as criminals simply for creating and disseminating code utilized by others – a precedent that contradicts established legal norms and raises significant First Amendment issues.“
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