Lummis objects to DOJ’s interpretation of regulations

The DOJ’s recent interpretations on the regulation of cryptocurrency wallets have received strong criticism from U.S. Senator Cynthia Lummis. Senator Lummis argues that this position would arguably classify all non-custodial software wallets as unlicensed financial activities, contrary to previous guidance provided by Treasury.

His concerns reveal a major departure from established norms, and it is possible that there is some excess that would impact individuals’ property rights in the cryptocurrency space.

Industry and legal views regarding the DOJ’s approach

Senator Lummis’ criticism was supported by the cryptocurrency community as well as legal experts. One critic is Peter Van Valkenburgh, research director at the Coin Center, who has doubts that the DOJ’s interpretation would broaden the definition of monetary transmission too broadly.

This understanding can lead every cryptocurrency wallet and smart contract developer to seek financial licensing, which can hinder innovation and scare off crypto industry players.

Additionally, Coin Center has made efforts to challenge these interpretations. They have deposit an amicus brief in support of the developer of Tornado Cash who is affected by this new regulatory guidance, and asserted that such activities are covered by the First Amendment.

This lawsuit illustrates the broader implications of the DOJ’s position, which could lead to profound changes in the way cryptocurrency technologies operate and are governed in the United States.

Read also: Senator Cynthia Lummis and Gillibrand Craft Bill for Stablecoin Regulation

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