A coalition of crypto advocacy groups has voiced support for a federal lawsuit challenging the U.S. Department of Justice’s (DOJ) efforts to prosecute open-source software developers under money transmission laws.
On Monday, crypto investment firm Paradigm, the DeFi Education Fund, the Blockchain Association, the Crypto Council for Innovation, and others filed an amicus brief in support of Michael Lewellen—a developer behind a non-custodial DeFi protocol he intends to release publicly.
The groups argue that the DOJ is improperly applying Section 1960 of Title 18 of the U.S. Code—a law originally designed to target unlicensed money transmitters—by using it against developers of decentralized, peer-to-peer software.
“The Government is actively prosecuting multiple developers of peer-to-peer cryptocurrency software […] even if those developers simply publish open-source software,” the brief states.
DOJ criticized for cracking down on crypto developers
The amicus brief sharply criticizes the DOJ’s interpretation of “money transmitting,” arguing it wrongly includes developers who simply write code for tools that others use to transact independently. It likens the DOJ’s logic to prosecuting a frying pan manufacturer for how someone uses it to cook.
“By its plain meaning, § 1960 does not stretch that far… one cannot ‘transmit’ or ‘transfer’ funds on someone’s behalf without accepting and relinquishing custody or control,” the brief states.
The crypto advocacy groups contend that this expansive interpretation has created legal uncertainty, deterring developers from building privacy-focused tools and decentralized financial infrastructure.
They also warn that continued prosecution under these terms could drive innovation overseas. “Faced with possible prosecution […] developers of peer-to-peer cryptocurrency transfer software will choose to either move offshore or stop creating their tools altogether,” the brief cautions.
The filing comes as the DOJ pursues cases like U.S. v. Storm and U.S. v. Rodriguez, where developers of platforms such as Tornado Cash face criminal charges under the same statute.
The brief calls on the court to reject the DOJ’s motion to dismiss and allow the lawsuit to proceed, arguing that only a declaratory judgment can clarify the law and protect open-source software development in the U.S.
Coin Center loses Tornado Cash appeal
On Thursday, the U.S. Court of Appeals for the Eleventh Circuit dismissed Coin Center’s lawsuit against the Treasury Department over its 2022 sanctions on Tornado Cash.
The case was dropped through a joint agreement between Coin Center and the Treasury, bringing an end to the crypto advocacy group’s legal challenge to the Office of Foreign Assets Control’s (OFAC) designation of the crypto mixing service.
Coin Center had argued that the Treasury overstepped its legal authority by sanctioning smart contracts and related wallet addresses. The lawsuit was part of a broader pushback against the sanctions, including a separate high-profile case supported by Coinbase on behalf of six Tornado Cash users.
