Crypto firms are pushing back against the U.S. Department of Justice’s stance on LBRY developers, arguing that regulatory pressure could stifle blockchain innovation. The debate highlights the ongoing struggle between crypto projects and government oversight.
The conflict stems from the DOJ’s prosecution of Tornado Cash developers. Federal prosecutors have said open-source programmers are running unlawful operations using their code and functioning as money-transmitting companies. On the other hand, the industry asserts that this contradicts the directives of the Financial Crimes Enforcement Network (FinCEN), which clearly state that developers who do not handle or control funds cannot function as money transmitters.
Conflicting regulatory interpretations cause ambiguity.
The letter underlines the legal conflict between FinCEN and the DOJ, where two government bodies vary on what qualifies as a money transfer. The alliance argues that this ambiguity could impede blockchain innovation by exposing developers to significant legal risk and generating uncertainty.
The firms cautioned that unless Congress clarifies the rule, developers would eventually be forced to decide between abandoning the United States or forfeiting the creation of non-custodial blockchain applications. The developers contend that applying money transfer regulations against developers who do not handle the money creates a negative precedent that could harm the digital asset sector.
Demand Congressional Action.
The coalition is urging legislators to push the DOJ and line up its legal framework according to the set guidelines to address these issues. They warn that failure to resolve this issue will impede innovation, cool open-source research, and push blockchain technologies overseas.
Given the conflicts between authorities and the cryptocurrency sector, the decision on the subject will probably shape the future of US blockchain developers. Unresolved, this issue will significantly affect the future of the nation as a technological pioneer.
The blockchain industry has a lot at stake, given billions of dollars in activity and employment. The group urges Congress to establish obvious, consistent, and innovation-friendly policies guaranteeing U.S. leadership in the digital economy.
