A member of cryptocurrency think tank Coin Center filed a lawsuit against US Attorney General Merrick Garland on Thursday, seeking a judge’s assurance that the Department of Justice (DOJ) will not be able to prosecute his upcoming cryptocurrency project. cryptocurrencies for violating money transmission laws in the future.
The lawsuit, filed by blockchain entrepreneur Michael Lewellen, claims the Department of Justice’s (DOJ) criminal prosecution of software developers who publish non-custodial cryptocurrency software, including ongoing prosecutions of Tornado Cash developer Roman Storm , and Samourai Wallet co-founder Keonne Rodríguez, is unconstitutional and violates the First and Fifth Amendments.
In addition to being unconstitutional, the lawsuit claims, the Justice Department’s prosecution of cryptocurrency developers “betrays[s] their own representations to the public,” that, unless developers have “full independent control over the value” being transferred, they are not acting as money transmitters.
Lewellen’s lawsuit comes amid growing concerns about government persecution of crypto privacy software developers, both in the United States and abroad. Tornado Cash’s Storm faces up to 45 years in prison if convicted on all charges related to his work with the cryptocurrency mixing service; Rodríguez faces a maximum sentence of 25 years for creating Samourai Wallet. Both men have pleaded not guilty and will go to trial this year.
In the absence of a clear regulatory and legal framework for cryptocurrencies, preventive lawsuits like Lewellen’s are increasingly common. Last year, two NFT artists filed a lawsuit against the US Securities and Exchange Commission (SEC) seeking a similar declaratory judgment protecting them from civil penalties by the SEC.
Read more: Does the SEC really have jurisdiction over NFT art? Two artists sue the SEC for an answer
Through his suit, Lewellen attempts to avoid the fate of Rodriguez and Storm. Their next project, Pharos, is essentially a cryptocurrency-based Kickstarter. Built on Ethereum, his crowdfunding platform will use a type of smart contracts he calls “collateral contracts” to ensure that donors will automatically get their money back if the project is not fully funded. The project will also have privacy features that will prevent donors to a project from being publicly identifiable.
As the creator and publisher of the Pharos software, Lewellen will only receive a predetermined fee for successful projects. According to his lawsuit, he “will never have control over the cryptocurrency that passes through Pharos.”
Garland, who was appointed by President Joe Biden, will soon leave the Justice Department. Incoming President Donald Trump’s pick to replace Garland as Attorney General, former Florida Attorney General Pam Bondi, is currently in nomination hearings. Garland’s successor will automatically be replaced as the lawsuit’s named defendant when he leaves the Justice Department.
