The recent warning from the Federal Bureau of Investigation (FBI) advising against the use of unregistered cryptocurrency money-transmitting services may be targeted at smart-contract-driven privacy tools, according to a crypto lawyer. The FBI's public service announcement, issued on April 25, urged Americans to use only registered Cryptocurrency Money Services Businesses (MSBs) that comply with existing Know Your Customer (KYC) and Anti-Money Laundering (AML) laws.

In its announcement, the FBI mentioned recent law enforcement operations against cryptocurrency services that were not licensed in accordance with federal law. The FBI warned that individuals using unlicensed services could face financial disruptions during law enforcement actions, especially if their funds are intermingled with illegally obtained funds.

Michael Bacina, the Digital Asset Partner at Piper Alderman lawyers, noted that the FBI's announcement seemed to be directed at warning users against using crypto mixing services. However, he highlighted that the warning was broad and missed many of the finer details regarding how decentralized systems operate.

Bacina stated, "While this appears to be an attempt to warn consumers away from smart-contract-driven privacy tools like Samourai or Tornado Cash, it’s a very broad warning which misses a great deal of nuance in how decentralized systems operate. The sooner fit-for-purpose regulation and clear guidance for cryptocurrency replaces regulation by enforcement, the better the outcomes for consumers will be."

On April 25, the co-founders of Bitcoin wallet and crypto mixing service Samourai Wallet were arrested on charges of money laundering. Samourai Wallet CEO Keonne Rodriguez and CTO William Hill were charged with money laundering and operating an unlicensed money-transmitting business, facing a maximum sentence of up to 25 years in prison.

Several commentators also raised concerns about the hazy definition of what could potentially be considered an MSB and questioned its implications for crypto service providers. Bankless co-founder Ryan Sean Adams described the FBI's announcement as "eerie" and highlighted the uncertainty around which services could fall under the designation of an MSB.

These developments occur amid escalating legal tensions between crypto firms and regulators in the United States. On April 25, Ethereum development firm Consensys sued the SEC, alleging that the regulator had orchestrated a campaign to "seize control over the future of cryptocurrency" by targeting Ether as a security.