Crypto Policy Advocacy Group Responds to Tornado Cash Indictment

Coin Center Responds to Tornado Cash Indictment, Raises Concerns About Criminalizing Software Code

Crypto policy advocacy group Coin Center has responded to the indictment of Tornado Cash co-founders Roman Semenov and Roman Storm, stating that the case could potentially criminalize the publication of software code. Coin Center argues that the charges brought by the U.S. Department of Justice may not align with Financial Crimes Enforcement Network guidelines.

Main Breakdowns:

The charges against Semenov and Storm allege unlicensed money transmission.
Coin Center argues that the activities described in the indictment are more related to software provision and communication services than money transmission.
The Bank Secrecy Act defines money transmitter services as the acceptance and transmission of currency or other value.
According to FinCEN guidelines, anonymizing software providers are not considered money transmitters.
Tornado Cash’s tools were provided in a manner consistent with this guidance, according to Coin Center.

The indictment’s allegations, including control over UI and smart contract software hosting, advertising of the Tornado Cash tool, and profiting from a governance token, do not necessarily equate to the acceptance and transmission of money, says Coin Center’s Research Director Peter Van Valkenburgh.

Hot Take:

The indictment of Tornado Cash co-founders raises concerns about the potential criminalization of software code. Coin Center argues that the charges may not align with existing guidelines and regulations. It is important to differentiate between software provision and the provision of regulated financial services. Policy and regulatory clarity is needed to avoid stifling innovation in the crypto space.