Crypto Entrepreneur Michael Lewellen Sues US Attorney General Merrick Garland to Protect Forthcoming Project From Prosecution

The lawsuit, filled by blockchain entrepreneur Michael Lewellen, claims that the Department of Justice's (DOJ) criminal prosecution of software developers who publish noncustodial cryptocurrency software is unconstitutional.

A member of the crypto think tank Coin Center has filed a lawsuit against U.S. Attorney General Merrick Garland, seeking a court order to prevent the Department of Justice (DOJ) from prosecuting his upcoming crypto project for violating money transmitting laws.

The lawsuit, filed by blockchain entrepreneur Michael Lewellen on Thursday, alleges that the DOJ's criminal prosecution of software developers who publish noncustodial cryptocurrency software — including the ongoing prosecutions of Tornado Cash developer Roman Storm and Samourai Wallet co-founder Keonne Rodriguez — is unconstitutional and violates the First and Fifth Amendments.

Lewellen's lawsuit comes amid growing concerns over government persecution of crypto privacy software developers, both in the U.S. and abroad. Storm, the developer of Tornado Cash, faces up to 45 years in prison if convicted on all counts related to his work with the crypto mixing service. Rodriguez, on the other hand, faces a maximum sentence of 25 years for creating Samourai Wallet. Both men have pleaded not guilty and are set to go on trial this year.

In the absence of a clear regulatory and legal framework for cryptocurrencies, preemptive lawsuits like Lewellen's are becoming increasingly common. Last year, two NFT artists filed a lawsuit against the U.S. Securities and Exchange Commission (SEC), seeking a similar declaratory judgment to protect them from civil penalties from the SEC.

Through his lawsuit, Lewellen is attempting to avoid the fate of Rodriguez and Storm. His upcoming project, called Pharos, is essentially a crypto-based Kickstarter. Built on Ethereum, his crowdfunding platform will use a type of smart contract, called an "assurance contract," 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 prevent a project's donors from being publicly identifiable.

As the creator and publisher of the Pharos software, Lewellen will only receive a predetermined fee from projects that are successful. According to his lawsuit, "he will never have control over the cryptocurrency that goes through Pharos."

Garland, who was appointed by President Joe Biden, is set to leave the DOJ soon. Incoming President Donald Trump's pick to replace Garland as Attorney General, former Florida Attorney General Pam Bondi, is currently undergoing nomination hearings. Garland's successor will be automatically substituted as the named defendant in the lawsuit upon his departure from the DOJ.