Crypto Advocates Support Lawsuit Challenging DOJ’s Crackdown on Open-Source Code

The U.S. crypto community is rallying behind a federal lawsuit that challenges the Department of Justice’s (DOJ) approach to prosecuting developers of open-source blockchain tools. At the center of the legal battle is the concern that writing and publishing code, particularly privacy-focused software, is being wrongfully equated with criminal conduct.

The lawsuit, filed in January 2025 by Michael Lewellen, a Texas-based software developer affiliated with the Pharos protocol, targets what he describes as unconstitutional overreach by the DOJ. Lewellen argues that merely developing and releasing open-source code does not constitute a crime, and that such activity is protected by the First Amendment.

Lewellen’s legal complaint seeks a declaratory judgment that he is not operating as a money transmitter, a designation that could otherwise subject him to heavy regulatory and criminal scrutiny. His legal team claims that DOJ enforcement efforts against developers like him amount to regulation by prosecution, a method of targeting individuals without clear legal standards.

The case has attracted support from advocacy groups, including Coin Center, a Washington D.C.-based nonprofit that focuses on crypto policy. In a public statement, Coin Center emphasized that the lawsuit could serve as a critical test of whether the U.S. government can punish individuals for simply writing and publishing code that others might use in a decentralized way.

This legal challenge arrives amid a broader debate about the DOJ’s prosecution of developers linked to privacy-preserving crypto tools. One high-profile case is that of Roman Storm, the co-founder of Tornado Cash, who was arrested in 2023 and charged with conspiracy to commit money laundering for his role in creating the Ethereum-based crypto mixer. Although Tornado Cash is open-source and non-custodial, U.S. authorities claim it facilitated illicit transactions by design.

In April 2025, DOJ Deputy Attorney General Todd Blanche issued a memo signaling a shift in strategy. The memo, which disbanded the National Cryptocurrency Enforcement Team (NCET), stated that future DOJ efforts would focus more clearly on prosecuting actual criminal conduct, such as fraud and terrorism financing, rather than targeting the publication of open-source tools themselves.

Supporters of the lawsuit argue that this memo, while welcome, does not provide sufficient legal protection to developers and that a clear judicial ruling is needed. They also fear that, unless clarified in court, ambiguity in how financial regulations apply to decentralized, non-custodial protocols could have a chilling effect on innovation in the blockchain space.

The court has yet to announce a date for oral arguments, but the case is already being watched closely by digital rights organizations and crypto developers across the country. If successful, the lawsuit could set a precedent limiting the government’s ability to prosecute individuals solely for contributing to open-source projects, a cornerstone of the crypto industry’s development model.

Until then, developers like Lewellen remain in uncertain legal territory, where writing code is an act of expression that could be interpreted as a criminal act depending on how others use it.