U.S. Senators Cynthia Lummis and Ron Wyden made a startling allegation, claiming that President Biden’s Justice Department is threatening to criminalize Bitcoin software development. The allegation stems from the Justice Department’s recent pursuit of cryptocurrency mixing services.

Lawmakers raise concerns about legal interpretation
In a bipartisan letter on May 9, senators questioned Attorney General Merrick Garland. They questioned the Justice Department’s “unprecedented interpretation” of the law governing money transmission. Furthermore, they argued that exposing non-custodial crypto software developers to potential criminal liability contradicts established interpretations and raises serious First Amendment issues.

The senators argued that criminal liability for developers contradicts existing interpretations and raises First Amendment issues. Wyden said;
The Justice Department's position conflicts with Treasury Department guidance
The senators’ letter highlights how the Justice Department’s position is at odds with guidance from the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), which has previously said that noncustodial crypto services should not be considered money transmitters because they do not control users’ funds.

Senator Loomis expressed concern, stating that “wallet software is no more responsible for illicit financing than a highway is for a bank robber’s getaway car.” This analogy highlights that the potential impact is not limited to the cryptocurrency space. Therefore, the DOJ’s stance could affect a wide range of software developers.

At the same time, Senator Wyden highlighted the dangerous precedent of treating developers as criminals, which could undoubtedly have a chilling effect on innovation and free speech.

This bipartisan letter is a powerful call for a reassessment of the government’s position. Failure to address these issues will have far-reaching consequences for the tech industry. Furthermore, it could stifle innovation in the evolving digital sector. Constructive dialogue is therefore essential to finding a balanced approach that both promotes progress and mitigates risks.