Arizona’s strategic crypto reserve bills heads for full floor vote  

A coalition of crypto firms has urged Congress to press the Department of Justice to amend an “unprecedented and overly expansive” interpretation of laws that were used to charge the developers of the crypto mixer Tornado Cash.A March 26 letter signed by 34 crypto companies and advocate groups sent to the Senate Banking Committee, House Financial Services Committee and the House and Senate judiciary committees said the DOJ’s take on unlicensed money-transmitting business means “essentially every blockchain developer could be prosecuted as a criminal.”The letter — led by the DeFi Education Fund and signed by the likes of Kraken and Coinbase — added that the Justice Department’s interpretation “creates confusion and ambiguity” and “threatens the viability of U.S.-based software development in the digital asset industry.”The group said the DOJ debuted its position “in August 2023 via criminal indictment” — the same time it charged Tornado Cash developers Roman Storm and Roman Semenov with money laundering.Storm has been released on bail, has pleaded not guilty and wants the charges dropped. Semenov, a Russian national, is at large.Source: DeFi Education FundThe DOJ has filed similar charges against Samourai Wallet co-founders Keonne Rodriguez and William Lonergan Hill, who have both pleaded not guilty.The crypto group’s letter argued that two sections of the US Code define a “money transmitting business” — Title 31 section 5330, defining who must be licensed and Title 18 section 1960, which criminalizes operating unlicensed.It added that 2019 guidance from the Treasury’s Financial Crimes Enforcement Network (FinCEN) gave examples of what money-transmitting activities and said that “if a software developer never obtains possession or control over customer funds, that developer is not operating a ‘money transmitting business.’”The letter argued that the DOJ had taken a position that the definition of a money transmitting business under section 5330 “is not relevant to determining whether someone is operating an unlicensed ‘money transmitting business’ under Section 1960” despite the “intentional similarity” in both sections and FinCEN’s guidance.Related: Hester Peirce calls for SEC rulemaking to ‘bake in’ crypto regulation The group accused the DOJ of ignoring both FinCEN’s guidance and parts of the law to pursue its own interpretation of a money-transmitting business when it charged Storm and Semenov.They said the result had seen “two separate US government agencies with conflicting interpretations of ‘money transmission’ — an unclear, unfair position for law-abiding industry participants and innovators.”The letter said that if not addressed, the Justice Department’s interpretation would expose non-custodial software developers “within the reach of the U.S. to criminal liability.”“The resulting, and very rational, fear among developers would effectively end the development of these technologies in the United States.”In January, Michael Lewellen, a fellow of the crypto advocacy group Coin Center, sued Attorney General Merrick Garland to have his planned release of non-custodial software declared legal and to block the DOJ from using money transmitting laws to prosecute him.Lewellen said the DOJ “has begun criminally prosecuting people for publishing similar cryptocurrency software,” which he claims extended the interpretation of money-transmitting laws “beyond what the Constitution allows.”Magazine: Meet lawyer Max Burwick — ‘The ambulance chaser of crypto’  

The US Senate has passed a resolution to kill a Biden administration-era rule to require decentralized finance (DeFi) protocols to report to the Internal Revenue Service, which will now head to US President Donald Trump’s desk.On March 26, the Senate voted 70-28 to pass a motion repealing the so-called IRS DeFi broker rule that aimed to expand existing IRS reporting requirements to crypto.The Senate had voted to pass the resolution earlier in March, which also passed the House, but it was sent back to the Senate for a final vote before it could be sent to Trump.The White House’s AI and crypto czar, David Sacks, has said Trump supports killing the rule.This is a developing story, and further information will be added as it becomes available.

US Securities and Exchange Commissioner (SEC) Hester Peirce offered a few suggestions for longer-lasting changes in crypto regulation between administrations with potentially different views.  Speaking at the DC Blockchain Summit on March 26, Peirce, who heads the SEC’s crypto task force, said she expected that the commission could create more “durability” for digital asset regulations through rulemaking at the agency and legislation in Congress. Such rulemaking and laws would be in contrast to guidance issued by the agency, such as a recent statement suggesting that memecoins do not qualify as securities. “I hope people won’t be sitting around thinking about the Howey test,” said Peirce, referring to a method to determine whether an asset is a security. “Your lawyers have to think about these things, I’m not saying that they’ll not be relevant, but it shouldn’t be the kind of thing that is driving what you decide to build. I want there to be enough clarity on the question of what falls in our jurisdiction and then, if it does, how you can move forward.”SEC Commissioner Hester Peirce speaking at the DC Blockchain Summit on March 26. Source: RumblePeirce’s remarks came as the SEC has dropped several investigations or enforcement actions against major crypto firms, including Coinbase, Ripple, Kraken and Immutable. Some see the commission’s change in policy under acting chair Mark Uyeda as an attempt by US President Donald Trump to have the agency drop cases against firms that supported his 2024 campaign.Related: SEC plans 4 more crypto roundtables on trading, custody, tokenization, DeFiSince the 119th session of Congress started in January, lawmakers have suggested that they intend to move forward with a market structure bill clarifying the roles the SEC and Commodity Futures Trading Commission will have over digital assets. On his third day in office, Trump signed an executive order establishing a working group that would explore, among other things, a regulatory framework for stablecoins.Is a new SEC chair on the horizon?Paul Atkins, whom Trump nominated as an SEC commissioner in December, will appear before US lawmakers in the Senate Banking Committee on March 27 and likely answer questions about his views on crypto regulation. Many in the crypto industry have indicated support for the former commissioner, who holds assets in real-world asset tokenization platform Securitize and controls a consulting firm tied to FTX.If his nomination moves through the banking committee, it’s unclear whether the full Senate will vote to confirm Atkins to a term ending in 2031. He is expected to take over as SEC chair from Commissioner Uyeda. Magazine: SEC’s U-turn on crypto leaves key questions unanswered