A crypto developer has sued the pinnacle of the US Justice Division and requested a court docket to rule that the crypto software program he needs to publish is authorized and to dam any doable future prosecution.
Michael Lewellen, a fellow of the crypto advocacy group Coin Middle, sued Lawyer Basic Merrick Garland on Jan. 16 in a Texas federal court docket, saying he plans to publish new non-custodial crypto software program specializing in crowdfunding campaigns referred to as Pharos.
“The issue? The federal authorities has begun criminally prosecuting folks for publishing comparable cryptocurrency software program, calling it unlicensed ‘cash transmitting,’” the grievance reads.
Lewellen claimed the Division of Justice prolonged its interpretation of money-transmitting legal guidelines “past what the Structure permits” in violation of the First and Fifth Amendments — rights defending speech and limiting authorities powers in legal proceedings, respectively.
Coin Middle is supporting the swimsuit and comes amid the crypto trade’s heightened concern over the prosecution of crypto software program devs.
The grievance mentions the US authorities’s instances in opposition to Twister Money founder Roman Storm and Samourai Wallet co-founder Keonne Rodriguez, each of who ran crypto mixers and are pinned on unlicensed money-transmitting enterprise and cash laundering fees.
Within the grievance, Lewellen’s attorneys argued his software wouldn’t give him “any management, possession, or path over the cryptocurrency that customers put via the software program” and claimed that “cash transmission requires management over the cash being moved, which isn’t current when somebody publishes non-custodial software program like Lewellen’s.”
“The DOJ’s broad interpretation of cash transmission legal guidelines threatens the flexibility to construct freely,” Lewellen wrote in a Jan. 16 X submit. “This isn’t nearly Pharos; it’s about the way forward for cryptocurrency innovation in America.”
Right now, I’m taking a stand in opposition to the Biden administration’s unjust crackdown on crypto improvement. I’ve filed a lawsuit in opposition to the DOJ to problem their flawed and unjust interpretation of the regulation.
My work on Pharos—a non-custodial protocol for public items…
— Michael Lewellen (@LewellenMichael) January 16, 2025
Lewellen requested the court docket to declare that his crypto enterprise doesn’t violate money-transmitting legal guidelines and block the DOJ from utilizing these legal guidelines to prosecute him, together with an order to pay his authorized charges alongside another reduction the court docket needs to grant.
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The grievance follows latest comparable preemptive lawsuits filed by plaintiffs who declare present legal guidelines and laws aren’t function match for crypto.
In April final yr, software program improvement firm Consensys sued the Securities and Change Fee, wanting a court docket to rule that Ether (ETH) “just isn’t a safety,” which was later thrown out.
In March, the clothes firm Beba also sued the SEC to get a court docket to find out that Beba’s self-titled token it had given away was not a safety, which the company had requested to be dismissed in November.
A month earlier, in February, the SEC was sued by crypto startup Lejilex, who was seeking a ruling that its deliberate crypto change wouldn’t violate securities legal guidelines. The SEC equally requested for the case to be tossed in October.
Lawyer Basic Garland is about to step down from his position with President-elect Donald Trump set to re-take the White Home, and the incoming president’s choose for the job, Pam Bondi, is in congressional affirmation hearings.
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