According to CoinDesk, Michael Lewellen, a blockchain entrepreneur and fellow at the crypto think tank Coin Center, has filed a lawsuit against U.S. Attorney General Merrick Garland. The legal action seeks assurance from a judge that the Department of Justice (DOJ) will not prosecute his upcoming cryptocurrency project for potential violations of money transmitting laws.
The lawsuit argues that the DOJ's criminal prosecution of software developers who create noncustodial cryptocurrency software is unconstitutional. It cites ongoing cases against Tornado Cash developer Roman Storm and Samourai Wallet co-founder Keonne Rodriguez as examples, claiming these actions infringe upon the First and Fifth Amendments. The suit further contends that the DOJ's approach contradicts its public statements, which suggest that developers are not considered money transmitters unless they have complete control over the value being transferred.
Lewellen's legal move highlights growing concerns about government actions against crypto privacy software developers in the U.S. and internationally. Roman Storm faces up to 45 years in prison if convicted on all charges related to his work with Tornado Cash, while Keonne Rodriguez could receive a maximum 25-year sentence for his involvement with Samourai Wallet. Both developers have pleaded not guilty and are set to stand trial this year.
In the absence of clear regulatory guidelines for cryptocurrencies, preemptive lawsuits like Lewellen's are becoming more frequent. Last year, two NFT artists filed a similar lawsuit against the U.S. Securities and Exchange Commission (SEC) to seek protection from potential civil penalties. Lewellen aims to avoid the legal challenges faced by Storm and Rodriguez with his project, Pharos, a crypto-based crowdfunding platform built on Ethereum. Pharos will utilize smart contracts known as "assurance contracts" to ensure donors receive refunds if a project is not fully funded, while also incorporating privacy features to protect donor identities.
As the creator of Pharos, Lewellen will only earn a predetermined fee from successful projects and will not have control over the cryptocurrency processed through the platform. The lawsuit also notes that Garland, appointed by President Joe Biden, will soon leave the DOJ. His successor, former Florida Attorney General Pam Bondi, is currently undergoing nomination hearings and will automatically replace Garland as the defendant in the lawsuit upon his departure.
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