Coinbase News: Crypto Firms Call for DOJ Reevaluation on Web3 Builder Prosecution

In a significant move, a coalition of 34 prominent cryptocurrency companies, including Coinbase and Kraken, has issued an open letter addressed to U.S. senators and congressmen. The letter urges the Department of Justice (DOJ) to reconsider its interpretation of the law that targets web3 developers, such as the Tornado Cash team, for potentially operating an ’unlicensed money transmitting business’ solely due to their creation of open-source software. This development comes on the heels of the Office of Foreign Assets Control (OFAC) lifting economic sanctions on Tornado Cash.

34 Crypto Companies Urge DOJ to Reconsider Prosecution of Web3 Builders

Coinbase, Kraken, and 32 other crypto companies have signed an open letter urging U.S. senators and congressmen to correct the Department of Justice’s interpretation of the law, which suggests that web3 developers like the Tornado Cash team are involved in ’unlicensed money transmitting business’ merely through creating open-source software. The letter, based on the Tornado Cash case, follows the recent removal of economic sanctions applied to Tornado Cash. While this was a win for the crypto industry, the law interpretation remains a concern.

South Carolina Drops Coinbase Lawsuit, Second State to Back Down on Staking

South Carolina officially dropped its lawsuit against Coinbase on March 27, marking another legal victory for the crypto exchange. The lawsuit, initially filed on June 6, 2023, accused Coinbase of offering unregistered securities through its staking program. The dismissal follows a similar decision from Vermont and a shift in the SEC’s stance on crypto regulation, which dropped its lawsuit against Coinbase on February 27. Paul Grewal, from Coinbase, mentioned that SC investors lost around $2 million in staking rewards. This development signals a potential easing of regulatory pressure on crypto exchanges and staking services.