US Department of Justice Sued Over Criminalization of Software Development
Michael Lewellen, a Dallas-based cryptocurrency entrepreneur and Coin Center Fellow, has filed a constitutional challenge against the Department of Justice (DOJ) for over criminalization of software development under the Biden Administration.
- Michael Lewellen has requested that a Texas federal court affirm the legality of his crypto startup and prevent the Department of Justice from prosecuting him. Coin Center, Bitcoin and cryptocurrency advocacy group, said it will support Lewellen in this case.
- The DOJ has prosecuted software developers for unlicensed money transmission, a serious federal felony, in two instances: United States v. Storm, targeting developers of the Tornado Cash protocol, and United States v. Rodriguez, targeting developers of the Samourai Bitcoin wallet.
Lewellen’s lawsuit makes three key claims:
- The DOJ does not have the statutory authority to prosecute an individual for operating an unlicensed "money transmitting" business if they merely create software tools for cryptocurrency. Unlike companies such as Western Union and Venmo, which hold and transfer money on behalf of customers, a person who develops tools for more effective cryptocurrency movement but does not control the money is not a "money transmitter."
- FinCEN has clarified that a money transmitter must have "control" over the money being transmitted, which does not apply to software creators in this context.
- If the DOJ’s position were permitted under the statute, it would violate the First Amendment. The Amendment protects individuals from being imprisoned for writing and publishing code.
- If the DOJ’s position were accepted under the statute, it would violate due process. Due process prevents the federal government from enforcing laws in an arbitrary or vague manner. This principle is violated when the government issues guidance stating that publishers of non-custodial cryptocurrency software are not money transmitters, yet prosecutes them as if they were.
"Michael should be free to build and publish the brilliant software he’s been working on—free from fear of unjust persecution. And the contrary position taken by the Department of Justice (DOJ) in the Tornado Cash and Samourai Wallet prosecutions is unconstitutional and anti-innovation," said Coin Center in a blog post.
- Coin Center also said it suspects more ongoing investigations aiming to wrongly charge more Bitcoin and cryptocurrency software developers.
- Under the DOJ's broad theory of liability, even a Bitcoin core developer could be targeted, said the non-profit, adding that in US v. Storm, Judge Failla has supported the DOJ's arguments, indicating a growingly hostile environment for cryptocurrency software developers in US.
Case Filing
Coin Center Blog / Archive
- Do you want more? Subscribe and get No Bullshit GM report straight to your mailbox and No Bullshit Bitcoin on Nostr.
- Feedback or news tips? Drop it here.
