DOJ’s Application of Money Transmission Laws to Ethereum Developers Faces Legal Challenge
2025-07-09 09:43:45
Main Idea
Crypto groups are opposing the DOJ's broad interpretation of money transmission laws to regulate open-source developers, arguing it misinterprets the original intent of the statute and threatens DeFi innovation.
Key Points
1. The DOJ's use of Section 1960 of title 18 U.S. Code to regulate open-source developers is being challenged by a coalition including Paradigm, the DeFi Education Fund, and the Blockchain Association.
2. The coalition argues that prosecuting developers for publishing open-source code undermines the US crypto ecosystem and creates legal uncertainty.
3. High-profile cases like US v. Storm and US v. Rodriguez highlight the DOJ's enforcement approach, targeting tools like Tornado Cash.
4. Coin Center's lawsuit challenging Treasury Department sanctions on Tornado Cash was dismissed, underscoring the complex regulatory landscape for decentralized protocols.
5. The combined legal pressures from the DOJ and Treasury Department signal a critical juncture for the US crypto industry, impacting future regulatory frameworks and global competitiveness.
Description
A coalition of prominent crypto organizations is challenging the DOJ’s attempt to classify open-source software developers as money transmitters under federal law. The legal battle centers on whether developers of
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