The Federal Bureau of Investigation’s recent warning to Americans from using unregistered cryptocurrency money-transmitting services might be aimed at smart-contract-driven privacy tools, according to a crypto lawyer.
In an April 25 public service announcement, the FBI urged Americans only to use registered Cryptocurrency Money Services Businesses that comply with existing Know Your Customer (KYC) and Anti-Money Laundering (AML) laws.
In its announcement, the FBI wrote that it had recently conducted law enforcement operations against cryptocurrency services that were not licensed in “accordance with federal law,” adding that anyone using unlicensed services could “encounter financial disruptions” during law enforcement actions, particularly if the money is intermingled with illegally obtained funds.
Michael Balcina the Digital Asset Partner at Piper Alderman lawyers told Cointelegraph that the FBI’s announcement seemed to be directed at warning users against using crypto mixing services but noted that the “broad” warning missed much of the finer details.
“While this appears an attempt to warn consumers away from smart-contract driven privacy tools like Samouri or Tornado Cash, it’s a very broad warning which misses a great deal of nuance in how decentralized systems operate.”
“The sooner fit-for-purpose regulation and clear guidance for cryptocurrency replaces regulation by enforcement, the better the outcomes for consumers will be,” Bacina added.
On April 25, the co-founders of Bitcoin wallet and crypto mixing service Samourai Wallet were arrested on charges of money laundering.
Samourai Wallet CEO Keonne Rodriguez and CTO William Hill were charged with money laundering and operating an unlicenced money-transmitting business, and currently face a maximum sentence of up to 25 years in prison.
Several other commentators on X also noted the hazy definition of what could potentially be considered an MSB and questioned what it could mean for crypto service providers.
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