Michael Lewellen, a blockchain developer, has filed a lawsuit against the U.S. Department of Justice, accusing it of misusing money transmission laws and impeding cryptocurrency innovation.
Allegations Against DOJ and Regulatory Ambiguity
Michael Lewellen, affiliated with the nonprofit Coin Center, bases the lawsuit on his work with Pharos, a non-custodial crowdfunding protocol. He argues that this protocol should be exempt from money transmission regulations since it operates without intermediaries. The lawsuit claims that prosecuting creators like Lewellen violates free speech protected by the First Amendment. He also points out inconsistent application of laws that create regulatory ambiguity, violating due process rights.
Legal Demands and Case Objectives
Lewellen's lawsuit seeks a declaration that his activities do not violate money transmission laws. It also requests an injunction to prevent the DOJ from prosecuting him and demands compensation for legal expenses. Lewellen emphasizes the broader significance of the case, highlighting the need to ensure innovation proceeds without fear. He criticizes regulatory uncertainty as a tool to deter blockchain developers.
Case in the Context of Overall Crypto Market Scrutiny
This lawsuit is part of a broader trend of increased scrutiny targeting cryptocurrency developers. Coin Center cited similar cases against Tornado Cash and Samourai Wallet creators, who faced charges related to cryptocurrency mixers. Samourai Wallet founders were arrested for alleged money laundering worth $2 billion, and the trial against Tornado Cash's creator will take place in April.
Michael Lewellen's case highlights the current challenges and uncertainties faced by developers in the cryptocurrency industry, emphasizing the need for clear legislation and the protection of innovation rights.
