In a bold move to protect the rights of cryptocurrency developers, blockchain entrepreneur Michael Lewellen has filed a groundbreaking lawsuit against U.S. Attorney General Merrick Garland. The suit, filled on Thursday, alleges that the Department of Justice’s recent prosecutions of noncustodial crypto software publishers violate both the First and Fifth Amendments.
Lewellen, a fellow at prominent crypto think tank Coin Center, is specifically seeking a declaratory judgment from the court that would shield his own upcoming project, a decentralized crowdfunding platform called Pharos, from facing similar criminal charges in the future.
The Heart of the Matter: Are Crypto Devs Money Transmitters?
At the crux of Lewellen’s argument is the contention that software developers who publish noncustodial cryptocurrency tools should not be treated as unlicensed money transmitters under the law. The ongoing, high-profile prosecutions of Tornado Cash developer Roman Storm and Samourai Wallet co-founder Keonne Rodriguez serve as the key exhibits in this constitutional battle.
Both Storm and Rodriguez are facing decades in prison for their work on privacy-focused crypto projects, despite having no direct control over user funds. Lewellen asserts that this application of money transmitter laws to software publishers not only tramples free speech and due process rights, but also contradicts the DOJ’s own prior guidance on the matter.
Preemptive Lawsuits: The New Norm in Crypto’s Legal Landscape?
With his own Ethereum-based crowdfunding dApp in the works, Lewellen isn’t waiting around to see how the chips fall. Pharos, which will utilize an innovative smart contract mechanism called “assurance contracts” to enable decentralized fundraising with privacy features, could conceivably put Lewellen in the same crosshairs as Storm and Rodriguez.
By filing this preemptive lawsuit, Lewellen aims to secure judicial clarity on the constitutional protections afforded to crypto developers before risking life and liberty. And he’s not alone in this strategy.
Just last year, two NFT artists took similar action against the SEC, seeking a judgment to shield their work from securities regulations. In an industry still sorely lacking clear legal and regulatory frameworks, this proactive approach may become increasingly common.
The Road Ahead: New Defendants, Enduring Questions
As the lawsuit begins its journey through the courts, the named defendant will soon change. Garland, a Biden appointee, is set to depart amidst the transition to the new Administration. President Trump’s nominee to replace him, former Florida Attorney General Pam Bondi, will automatically step into the role of defendant once confirmed.
But while the names may change, the fundamental questions at stake endure:
- Can the government prosecute crypto developers as money transmitters?
- Does this violate constitutional rights to free speech and due process?
- Will the courts uphold protections for code publishers?
The outcome of this case, along with the Storm and Rodriguez trials, could reshape the landscape for crypto innovation in the United States. Developers, entrepreneurs, and the wider industry will be watching intently, with the future of decentralized finance potentially hanging in the balance.
Coin Center takes the fight to the DOJ! ⚖️🗽
— Coin Center (@coincenter) January 16, 2025
Our own @MichaelLewellen has filed suit against AG Garland, challenging the constitutionality of criminal charges against devs of noncustodial crypto software.
This is about defending the rights of coders & the future of permissionless innovation.
As crypto’s legal sagas unfold in 2025, cases like Lewellen’s will shape the parameters of what’s possible in this ever-evolving space. While uncertainty reigns in the present, the precedents set today will chart the course for a decentralized tomorrow.
