New Tornado Cash Indictments Run Counter to FinCEN Guidance – Coin Center

“The only thing the indictment claims regarding the defendants’ unlicensed money transmission is that they “engaged in the business of transferring funds on behalf of the public” and did so without registering with FinCEN.””An anonymizing software provider is not a money transmitter. FinCEN regulations exempt from the definition of money transmitter those persons providing only’the delivery, communication, or network access services used by a money transmitter to support money transmission services.’ This is because suppliers of tools (communications, hardware, or software) that may be utilized in money transmission, like anonymizing software, are engaged in trade and not money transmission.””The indictment provides various factual allegations describing the activities the defendants performed, but all of those facts point to the defendants fitting squarely within FinCEN’s guidance on anonymizing software providers rather than them being money transmitters.””As for “controlling” the smart contracts before May 2020, the analysis may be more complicated.””We’ll be closely monitoring developments in this case and will have more to say as further facts emerge.”

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