A federal judge has dismissed a lawsuit from crypto developer Michael Lewellen, who sought legal protection to release noncustodial crowdfunding software. The judge ruled Lewellen failed to prove he faced imminent criminal prosecution, distinguishing his case from those against Tornado Cash and Samourai Wallet developers. The decision is a setback for DeFi advocates seeking clearer legal protections for software creators.
A federal judge has dismissed a lawsuit filed by crypto developer Michael Lewellen seeking pre-approval for his noncustodial crowdfunding software. Judge Reed O’Connor found Lewellen’s argument that he risked prosecution “unpersuasive,” stating he hadn’t proven imminent legal threat.
Lewellen’s lawsuit aimed to prevent potential criminal charges similar to those against Roman Storm of Tornado Cash and Samourai Wallet founders Keonne Rodriguez and William Lonergan Hill. All three were charged with operating unlicensed money-transmitting businesses, a point of contention in the DeFi community.
The judge noted a key distinction, writing “The ‘core conduct’ of those cases is money laundering. By contrast, the core conduct here would be running a business.” Unlike the other cases, prosecutors alleged those developers knew criminals used their software. Despite support from major crypto advocacy groups, the court dismissed the case.
“Disappointed to see the court dismiss my suit today,” Lewellen wrote on X. His lawyers are exploring options for appeal. The ruling underscores ongoing legal uncertainty for DeFi developers as related legislative efforts in Congress approach a potential slowdown due to the election season.
