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A crypto developer has sued the head of the US Justice Department and asked a court to rule that the crypto software he wants to publish is legal and to block any possible future prosecution.
Michael Lewellen, a fellow of the crypto advocacy group Coin Center, sued Attorney General Merrick Garland on Jan. 16 in a Texas federal court, saying he plans to publish new non-custodial crypto software focusing on crowdfunding campaigns called Pharos.
“The problem? The federal government has begun criminally prosecuting people for publishing similar cryptocurrency software, calling it unlicensed ‘money transmitting,’” the complaint reads.
Lewellen claimed the Department of Justice extended its interpretation of money-transmitting laws “beyond what the Constitution allows” in violation of the First and Fifth Amendments — rights protecting speech and limiting government powers in criminal proceedings, respectively.
Coin Center is supporting the suit and comes amid the crypto industry’s heightened concern over the prosecution of crypto software devs.
The complaint mentions the US government’s cases against Tornado Cash founder Roman Storm and Samourai Wallet co-founder Keonne Rodriguez, both of who ran crypto mixers and are pinned on unlicensed money-transmitting business and money laundering charges.
In the complaint, Lewellen’s lawyers argued his software would not give him “any control, possession, or direction over the cryptocurrency that users put through the software” and claimed that “money transmission requires control over the money being moved, which is not present when someone publishes non-custodial software like Lewellen’s.”
“The DOJ’s broad interpretation of money transmission laws threatens the ability to build freely,” Lewellen wrote in a Jan. 16 X post. “This isn’t just about Pharos; it’s about the future of cryptocurrency innovation in America.”
Today, I’m taking a stand against the Biden administration’s unjust crackdown on crypto development. I’ve filed a lawsuit against the DOJ to challenge their flawed and unjust interpretation of the law.
My work on Pharos—a non-custodial protocol for public goods…
Lewellen asked the court to declare that his crypto business doesn’t violate money-transmitting laws and block the DOJ from using those laws to prosecute him, along with an order to pay his legal fees alongside any other relief the court wishes to grant.
Related: Appellate court grants partial win for Coinbase over SEC rules
The complaint follows recent similar preemptive lawsuits filed by plaintiffs who claim current laws and regulations aren’t purpose fit for crypto.
In April last year, software development company Consensys sued the Securities and Exchange Commission, wanting a court to rule that Ether (ETH) “is not a security,” which was later thrown out.
In March, the clothing company Beba also sued the SEC to get a court to determine that Beba’s self-titled token it had given away was not a security, which the agency had asked 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 planned crypto exchange wouldn’t violate securities laws. The SEC similarly asked for the case to be tossed in October.
Attorney General Garland is set to step down from his role with President-elect Donald Trump set to re-take the White House, and the incoming president’s pick for the job, Pam Bondi, is in congressional confirmation hearings.
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