A fellow at the crypto think tank Coin Center filed a lawsuit against U.S. Attorney General Merrick Garland on Thursday. The lawsuit aims to secure a judge’s assurance that the Department of Justice (DOJ) will not prosecute his forthcoming crypto project for alleged violations of money transmitting laws in the future.
The lawsuit was filed by blockchain entrepreneur Michael Lewellen and challenges the DOJ's criminal actions against software developers who create noncustodial cryptocurrency software. This includes ongoing cases against Roman Storm, a developer at Tornado Cash, and Keonne Rodriguez, co-founder of Samourai Wallet. The complaint asserts that prosecuting these developers is unconstitutional, violating both the First and Fifth Amendments.
Lewellen's case emerges amid increasing worries about government actions against developers of privacy-focused crypto software, noted not just in the U.S. but also internationally. Roman Storm faces a potential 45-year prison sentence if he is convicted, whereas Rodriguez could face up to 25 years for his involvement with Samourai Wallet. Both have pleaded not guilty and are scheduled for trial later this year.
In the absence of a defined legal framework for cryptocurrencies, proactive legal strategies like Lewellen's are becoming more frequent. Recently, two NFT artists took similar measures against the U.S. Securities and Exchange Commission (SEC) to obtain protective judgments against potential civil penalties.
Through this lawsuit, Lewellen aims to avert the same fate as his peers. His upcoming initiative, Pharos, akin to a crypto-based Kickstarter, will utilize Ethereum’s smart contracts, termed "assurance contracts," to ensure funding accountability to donors, while also incorporating privacy features to keep donor identities concealed. As the creator and distributor of the Pharos software, Lewellen emphasizes his limited control over transactions conducted through Pharos, asserting, "he will never have control over the cryptocurrency that goes through Pharos."
Garland, under President Joe Biden's administration, will soon exit the DOJ. Incoming President Donald Trump's selection to succeed Garland, Pam Bondi, a former Florida Attorney General, is currently involved in nomination processes. When Garland departs, his successor will automatically take his place as the named respondent in this lawsuit.
