More than 30 cryptocurrency companies and blockchain organizations have jointly signed a letter to the U.S. Congress, requesting the U.S. Department of Justice (DOJ) to clarify how the law applies to crypto companies. The reason is that the DOJ is accused of interpreting money transmission laws in an overly broad manner, posing a risk to the industry's development.



🔥 Why Does Crypto Oppose the DOJ's Interpretation?


The DeFi Education Fund (#DEF ) – an advocacy organization for the DeFi sector – has led the opposition group, criticizing the DOJ for abusing Section 1960 of federal law to prosecute crypto developers in a manner akin to "suffocating with criminal charges."


Major companies in the industry signed the letter, including:

✅ Major exchanges: Coinbase, Kraken, Crypto.com.

✅ Leading venture capital funds: Andreessen Horowitz, Paradigm, Dragonfly.

✅ Prominent blockchain projects: Uniswap Labs, Polygon Labs, Consensys.


The crux of the issue lies in Section 1960, a statute governing the operation of "money transmitting businesses." The DOJ is applying this law unreasonably, expanding its scope to the point of potentially criminalizing decentralized software developers (DeFi, AI, crypto, etc.).



🏛️ Tornado Cash – The "Bomb" That Angers Crypto?


A typical example of how #DOJ applies Section 1960 is the prosecution of Tornado Cash co-founder, Roman Storm, on money laundering-related charges.


🔥 The DOJ argues: Tornado Cash has been exploited by state-sponsored hackers to conduct illegal transactions, thus Storm must be held accountable.

🔥 The crypto community opposes: Tornado Cash is just source code, does not directly control users, so Storm cannot be charged with illegal money transmission.


Nevertheless, Judge Katherine Polk Failla upheld the lawsuit, asserting that the laws Storm is accused of violating do not target free speech but rather aim at money laundering, unlicensed money transmission, and evading economic sanctions.



📜 Core Issue: Is the Law Too Broad, and Is the DOJ Interpreting It Arbitrarily?


Section 1960 is one of two statutes that define "money transmitting business," with the other being Section 5330. Both have similar content.


🚨 However, the DOJ has interpreted Section 1960 differently from Section 5330. Specifically:


  • Section 5330 defines who must register as a money transmitting business.



  • Section 1960 stipulates penalties for operating without a license.




⚠️ The issue is: the DOJ ignored the 2019 guidance from FinCEN (the U.S. Financial Crimes Enforcement Network) and expanded the definition of "money transmitting" to an unreasonable extent, putting many blockchain developers at risk of criminal prosecution.


According to the DeFi Education Fund, no criminal court has ever supported this interpretation by the DOJ. If not amended, it could pose a long-term threat to crypto developers in the U.S.



💼 Crypto & U.S. Government: Is the Relationship Improving?


Under President Donald Trump's administration, the relationship between crypto and the government has seen many positive developments:

✅ The SEC is gradually closing many investigations and major lawsuits.

✅ Regulations on stablecoins are becoming clearer.


However, clarifying Section 1960 remains an important challenge. According to representatives of the DeFi Education Fund, protecting decentralized software developers is a long-term goal, and they believe Congress needs to intervene.




Earlier this year, Pharos, a non-custodial software development company, filed a lawsuit against the DOJ for misinterpreting Section 1960, accusing the agency of unfairly criminalizing the crypto industry.


🚨 If Pharos wins the case, it will set an important precedent for the entire cryptocurrency industry, helping to protect DeFi projects from unreasonable legal interpretations.



🎯 In Summary: Does Crypto Need U.S. Congress Intervention?


The letter from 34 crypto companies sent to the U.S. Congress is an important move, demonstrating that the industry is working to apply pressure for legal adjustments.


❗ If the U.S. Congress does not clarify Section 1960, the DOJ may continue to expand prosecutorial authority, threatening not only the crypto industry but also other decentralized technology sectors like AI.


❗ However, with positive signals from the Trump administration, this could be an opportunity for the crypto industry to achieve a sustainable victory in the legal battle with the DOJ.


👉 Will the U.S. Congress respond? Will the crypto industry be protected? The answer will come soon. 🚀