Allegations of Overreach
Michael Lewellen, a blockchain developer, filed a lawsuit against the Department of Justice (DOJ), challenging its classification of non-custodial crypto tools as money transmitters under federal law.Pharos and Non-Custodial Innovation
Lewellen’s Ethereum-based platform, Pharos, employs smart contracts to manage crowdfunding without intermediaries. He argues that the DOJ’s interpretation of 18 U.S.C. §1960 criminalizes software developers rather than focusing on entities engaging in actual money transmission.Constitutional and Industry Impact
The lawsuit highlights First and Fifth Amendment violations, claiming that the DOJ’s actions stifle innovation by targeting developers of privacy-preserving technologies. It references previous cases like Tornado Cash and Samourai Wallet, showing a pattern of government overreach.Broader Implications for Crypto Development
Lewellen’s case could set a precedent for protecting non-custodial crypto tools. As incoming Attorney General Pam Bondi assumes office, the lawsuit draws attention to the balance between regulation and innovation in the U.S. blockchain sector.
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