DOJ’s “Hyper-Aggressive” Cryptostance Regarding Self-Custody Wallets Is Blasted by Senator Cynthia Lummis

Senator Cynthia Lummis (R-WY) criticized the U.S. Department of Justice (DOJ) on Wednesday for its controversial stance on self-custody wallets after unlicensed money-transmitting charges were brought against crypto mixers Tornado Cash and Samourai Wallet.“I am deeply troubled by the Department of Justice’s hyper-aggressive argument that non-custodial software can constitute a money transmission service,” Lummis Tweeted. “This stance contradicts existing Treasury guidance, common sense and violates the rule of law.”

Cynthia Lummis Slams DOJ Over Self-Custody Wallet Controversy

The senator’s remarks come after William Lonergan Hill and Keonne Rodriguez, the founders of Samourai Wallet, were arrested by the DOJ on suspicion of money laundering and running an unlicensed money-transmitting company.

Roman Storm, the developer of Tornado Cash, attempted to have several charges against him, including breaking sanctions laws by creating and running the crypto mixer, dismissed by the DOJ just last week.

Members of the crypto community are concerned because the swift legal action against both companies may have an impact on the legality of owning and holding digital asset wallets in general.

The senator went on to say, “Arguments against self-custody software threaten the fundamental property rights that are core to being an American.” “I will do everything I can to fight for your rights to hold your own keys and run your own node.”

Tornado Cash And Samurai Wallet In Hot Water Amidst Crypto Crackdown

The DOJ’s legal actions against Tornado Cash and Samourai Wallet signal the U.S. government’s willingness to treat crypto mixers as unlicensed money transmitters, potentially opening the floodgates for a wave of regulatory actions across the sector.Their main argument is whether crypto mixing, a process used to obfuscate funds to make them harder to trace, safeguards privacy or shelters illicit activity. 

The cryptocurrency mixer “facilitated more than $1 billion in money laundering transactions and laundered hundreds of millions of dollars for the Lazarus Group,” according to U.S. prosecutors.

Meanwhile, Samourai Wallet is accused of executing “more than $2 billion in unlawful transactions and more than $100 million in money laundering transactions from illegal dark web markets.”

Meanwhile, Samourai Wallet is accused of executing “over $2 billion in unlawful transactions and facilitating more than $100 million in money laundering transactions from illegal dark web markets.”

Storm is defending himself against the U.S. government’s case against Samourai Wallet, pointing to users’ right to privacy, even though the case is still in its early stages.

Attorneys for Storm contended that “Mr. Storm is a developer, and his only agreement, together with the members of his U.S.-based company, was to build software solutions to provide financial privacy to legitimate cryptocurrency users.” “This is not a crime.”

Whether Lummis and other U.S. lawmakers take congressional action against what many in the crypto community believe to be executive overreach or whether self-custody wallet users will be subject to consequences for what the U.S. government may perceive as unlicensed money-transmitting is a matter of time.