US Justice Department Targets Self-Custody Crypto Wallet Developers

The US Justice Department has initiated legal actions against developers and operators of self-custody cryptocurrency wallets, including Samourai Wallet and Tornado Cash. Samourai Wallet founders Keonne Rodriguez and William Lonergan were arrested, accused of conducting over $2 billion in illegal transactions without a money transfer license. Similarly, Roman Storm, developer of Tornado Cash, faces charges of money laundering and violating sanctions. Senator Cynthia Lummis criticized the Justice Department’s aggressive approach, arguing that considering non-custodial software as a money transfer service is incompatible with current Treasury guidelines and threatens fundamental property rights. Lummis stressed the need for policymakers to create a robust regulatory framework to prevent the exploitation of cryptocurrencies by malicious actors while supporting innovation in the sector.

The Justice Department’s actions raise concerns about the implications for privacy-focused cryptocurrency wallets and decentralized finance (DeFi) projects. As the regulatory landscape evolves, finding a balance between security and innovation will be crucial for the future of the crypto industry.