Biden Administration Threatens to Criminalize Bitcoin Principles, Says Senator Cynthia Lummis

Pro-Bitcoin Senator Cynthia Lummis of Wyoming expressed concern about President Joe Biden’s stance cryptographic regulation in the United States. Senator Lummis condemned the misinterpretation of FinCEN laws, saying they “threaten to criminalize the fundamentals of Bitcoin and other cryptocurrencies.

With the support of Senator Ron Wyden, Lummis has escalated the issue of how such misinterpretation could stifle cryptographic innovation in the United States.

Deviations in FinCEN Interpretation for Bitcoin and Crypto

Two US senators, Cynthia Lummis and Ron Wyden, have criticized the growing challenge posed by cryptocurrency regulation in the country. In a joint letter addressed to U.S. Attorney General Merrick Garland, senators highlighted a perceived deviation from FinCEN laws.

According to the letter, the US Department of Justice (DOJ) misinterprets FinCEN’s money transmission rules.

The senators acknowledged that the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has well-structured regulations. However, the Justice Department’s misinterpretation could criminalize the fundamentals of Bitcoin and other crypto networks.

Furthermore, the senators warned that such moves will stifle the innovative aspect of cryptocurrencies. They believe this would weaken people’s trust in the rule of law.

Part of the letter reads:

“The Biden administration’s change to FinCEN’s interpretation not only departs from legal precedent, but also undermines the entrepreneurial spirit that drives America’s global economic prominence.”

Additionally, the senators delved into the role of FinCEN laws in the cryptocurrency industry. According to the law, there are no registration requirements for non-custodial services related to money transmission.

In particular, non-custodial services do not involve any direct receipt or control of digital assets. Therefore, the letter argues that such service providers cannot fall under the category of money transmission activities.

The Senators further explained that Users retain exclusive custody and control over their private keys cryptographic resources. Therefore, all transactions are signed and processed without third-party interference on the user’s local device.

Difference between Wallet software and illicit finance

Additionally, Senator Lummis stressed the importance of distinguishing between wallet software and illegal financial transactions. According to the senator, digital wallets serve as storage and security wallets for users.

Lummis rejects the claim that wallets facilitate criminal activity. Therefore, he has maintained his position in preserving users’ rights to self-custody of crypto assets.

The senator also reiterated the need to safeguard the right to keep private keys in personal wallets. Such practices will stimulate the growth of the cryptocurrency industry and ensure its continued operation in compliance with the law.

Senator Wyden also highlighted the need to enforce the law against the illicit use of digital assets. According to the senator, government agencies should be careful of those who engage in money laundering and tax evasion.

However, he cautioned agencies to avoid introducing conflicting interpretations of the law into their operations. He noted that such errors could target software developers in the cryptocurrency industry.

Wyden said:

“I am concerned that the Justice Department’s interpretation would unfairly classify software developers as criminals simply for creating and disseminating code used by others – a precedent that contradicts established legal norms and raises important First Amendment questions.”

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