Tornado Cash indictment: Coin Center challenges money-transmission claims

TL;DR Breakdown

  • Coin Center argues that the evidence doesn’t conclusively prove any money-transmission-related crimes.
  • Peter Van Valkenburgh emphasizes that Tornado Cash provides software for money transmission, not the actual money.
  • Valkenburgh believes the indictment contradicts FinCEN’s guidance.

Description

On August 23, the U.S. Office of Foreign Asset Control (OFAC) made headlines. They accused Roman Storm and Roman Semenov of conspiring to operate an unauthorized money-transmitting enterprise. However, Coin Center, a prominent cryptocurrency advocacy organization, has since voiced its concerns. They argue that the evidence presented doesn’t conclusively prove any money-transmission-related crimes. Coin Center’s … Read more

On August 23, the U.S. Office of Foreign Asset Control (OFAC) made headlines. They accused Roman Storm and Roman Semenov of conspiring to operate an unauthorized money-transmitting enterprise. However, Coin Center, a prominent cryptocurrency advocacy organization, has since voiced its concerns. They argue that the evidence presented doesn’t conclusively prove any money-transmission-related crimes.

Coin Center’s research director, Peter Van Valkenburgh, has been particularly vocal. In a recent opinion piece, he emphasized that Tornado Cash merely offers software for money transmission. Significantly, it doesn’t provide the money itself. Valkenburgh believes the indictment’s claims contradict the guidance of the U.S. Financial Crimes Enforcement Network (FinCEN).

Moreover, Valkenburgh highlighted a crucial point. The indictment doesn’t convincingly show that the accused “engaged in transferring funds on behalf of the public” without FinCEN registration. He referenced FinCEN’s definition under the U.S. Bank Secrecy Act. It clearly states that “an anonymizing software provider is not a money transmitter.”

Valkenburgh also pointed to another FinCEN passage. It clarifies that only program users can be considered money transmitters. The program’s developers have a clear stance on this. They state, “A person that uses the software to anonymize their transactions can be a user or a money transmitter, depending on the transaction’s purpose.”

Hence, Valkenburgh contends that Tornado Cash’s role is straightforward. By simplifying the process for users to send money via the protocol’s smart contracts, it doesn’t label the developers as money transmitters. He said, “Providing tools for others to transmit their money doesn’t make them transmitters.”

Additionally, Valkenburgh challenged another indictment claim. It alleges that Storm and Semenov controlled the protocol’s underlying smart contracts. He believes this is a misconception.

Ethereum smart contracts can be designed in numerous ways. Users can have different levels of influence over their execution. Consequently, understanding this nuance is vital in determining if someone is truly involved in money transfer.

The debate around the Tornado Cash developers’ indictment is heating up. Coin Center’s arguments present a compelling case for reevaluating the charges. As the crypto industry evolves, clear legal definitions and understandings are more crucial than ever.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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