The post Coinbase and Kraken Urge to Block Prosecuting Web3 Builders appeared on BitcoinEthereumNews.com.

On Mar. 26, an open letter signed by 34 crypto companies urged the U.S. senators and congressmen to correct the code interpretation by the Department of Justice, where the DOJ suggested that web3 developers like the Tornado Cash team were involved in “unlicensed money transmitting business” simply through creating an open-source software. The letter doesn’t mention Tornado Cash or Samourai developers, who were prosecuted for their involvement in the creation of the respective Bitcoin mixer platforms. However, the letter is based on the Tornado Cash case. It saw the light of day following the recent removal of economic sanctions applied to Tornado Cash. The lifting of sanctions was a win for the crypto industry but not an ultimate victory, as the law interpretation by the DOJ created a precedent dangerous for other software developers. What’s in this letter? In the letter, the signees urged officials to revisit the code interpretation, noting that the DOJ’s policy position “creates confusion and ambiguity with the spectre of criminal liability, and ultimately threatens the viability of U.S.-based software development in the digital asset industry and other industries.” They concluded that “under this interpretation, essentially every blockchain developer could be prosecuted as a criminal.” According to the letter, the term “money transmitting business” is mentioned in U.S. law twice–in the criminal code and the Bank Secrecy Act’s licensure requirements. The signees point out that according to the code, to participate in “money transmitting business,” one needs to possess and operate other people’s funds on their behalf. Without this possession, a “money-transmitting business” is something else. The developers creating noncustodial web3 platforms don’t have access to users’ funds. Moreover, platforms like Tornado Cash are decentralized and open-source. Also, it is not a business. Thus, the developers cannot be judged for “unlicensed money transmitting business.” Here’s what…

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Filed under: News - @ March 28, 2025 11:19 am