A recent FBI advisory cautioning Americans against using unlicensed cryptocurrency money transmission services overlooks crucial nuances in how crypto services function, according to Michael Bacina, a Partner at Piper Alderman.

Bacina suggested that the FBI's announcement may specifically target privacy tools driven by smart contracts. The Bureau's April 25 public service announcement emphasized the importance of using registered Cryptocurrency Money Services Businesses compliant with KYC and AML regulations.

The FBI stated that recent enforcement operations targeted unlicensed cryptocurrency services, warning users of potential financial disruptions if they engage with unregistered services, especially if funds are linked to illicit activities.

Bacina highlighted the broad nature of the warning, indicating it might not adequately address the complexities of decentralized systems like smart contract-based privacy tools such as Samourai or Tornado Cash.

He emphasized the need for clear regulations and guidance to replace enforcement-driven regulation for cryptocurrency, ensuring better outcomes for consumers.

On April 25, Samourai Wallet's co-founders, Keonne Rodriguez and William Hill, were arrested on charges of money laundering and operating an unlicensed money-transmitting business. This development sparked discussions among industry commentators about the ambiguous definition of Money Services Businesses (MSBs) and its implications for crypto service providers.

Bankless co-founder Ryan Sean Adams described the FBI's announcement as "eerie," questioning which services technically fall under the MSB designation. These discussions coincide with heightened legal tensions between crypto firms and regulators in the United States.

In a related development, on April 25, Consensys, an Ethereum development firm, sued the SEC, alleging the regulator's actions aimed to assert control over the future of cryptocurrency, particularly targeting Ether.