- Coin Center director argues against the indictment charges leveled on Tornado Cash developers.
- Coin Center believes that while Tornado Cash has a hand in people having access to money transmission, it does not mean they are money transmitters themselves.
The research director for the Crypto advocacy group Coin Center, Peter Van Valkenburgh, is arguing against the court charges laid against Tornado Cash, insisting that the crypto mixer is an anonymizing software provider and not a money transmitter like the latest indictments are claiming.
Coin Center believes that the two Tornado Cash developers are being charged wrongly, especially criticizing the latest indictments and claiming that the facts offered do not show any apparent violations of the alleged money-transmitting related offenses.
The Tornado Cash developers, Roman Storm and Roman Semenov, were both indicted by the United States Office of Foreign Asset Control on August 23 for charges of conspiracy to operate an unlicensed money-transmitting scheme, alongside other charges.
Adding a follow-up post on the opinion, the director of Coin Center, Van Valkenburgh, argued that the claims made by the authorities in the indictment were in contrast to guidance from the United States Financial Crimes Enforcement Network. They contended that Tornado Cash only provides software that helps transmit money as opposed to the indictment claims of them transmitting the money themselves.
Valkenburgh wrote, “The only thing the indictment claims regarding the defendant’s unlicensed money transmission is that they engaged in transferring funds on behalf of the public and made the move without registering their business with FinCEN.”
Van Valkenburgh, however, added that the indictment made no mention of any facts that showed that the defendants indeed engaged in any activities that could be considered as money transmission under the relevant laws guiding the actions.
The director pointed to an interpretation made by the FinCEN as to what could constitute money transmission services using the United States Bank Secrecy Act, which states that “An anonymizing software provider is not a money transmitter.”
Peter then referred to another excerpt from the Bank Secrecy Act, which states that only software users can be considered money transmitters.
“A person that utilizes the software to anonymize the person’s transactions will either be a user of a money transmitter, depending on the purpose behind each transaction.”
Valkerburgh added that while Tornado Cash’s actions made it easier for individuals to use the protocol’s smart contract to transmit money, he believes it doesn’t mean they were transmitters.
Conclusion
The director of Coin Center also pointed out claims in the indictment that suggested that the two developers in charge had full control over the protocol’s smart contracts.
“Ethereum smart contracts are variable, and sometimes people have no control over their operations. They could have some or total control. This fact is necessary in determining if one is indeed performing money transmission.”
Coin Center first started voicing their displeasure towards the United States treasury in October 2022, when they sued the agency for their unprecedented and unlawful sanctioning of Tornado Cash.
