- A federal judge dismissed a lawsuit from crypto developer Michael Lewellen seeking pre-approval for his noncustodial crowdfunding software.
- The judge ruled Lewellen failed to prove he faced imminent prosecution, highlighting a distinction from cases like Tornado Cash.
- The decision is a setback for DeFi advocates pushing for legal protections as major crypto legislation faces a tight timeline.
- Key industry groups, including the Blockchain Association and DeFi Education Fund, supported the lawsuit.
In a significant ruling for decentralized finance, a federal judge on Wednesday dismissed crypto developer Michael Lewellen’s lawsuit against the U.S. attorney general. The lawsuit, filed in the Northern District of Texas, sought a court order to preemptively approve his publication of noncustodial crowdfunding software, which he argued could otherwise lead to a five-year prison sentence.
Lewellen cited the prosecutions of Tornado Cash developer Roman Storm and Samourai Wallet founders Keonne Rodriguez and William Lonergan Hill as precedent for his fears. However, Judge Reed O’Connor found Lewellen’s argument “unpersuasive,” stating the core conduct in those cases was alleged money laundering, not simply running a business. Consequently, the judge determined Lewellen had not demonstrated a credible threat of imminent prosecution for his planned charity-focused Ethereum protocol.
Meanwhile, the developer wrote on X, “Disappointed to see the court dismiss my suit today.” His legal team is now exploring all options for a path forward following the ruling. This judicial setback arrives as lawmakers race to finalize major crypto legislation expected to include DeFi developer protections before the U.S. election season halts Congressional action.
The case garnered strong backing from major crypto advocacy groups, including the Blockchain Association and the Solana Policy Institute. Despite a 2025 memo from Deputy Attorney General Todd Blanche advising against prosecuting developers for their users’ actions, prosecutors secured guilty pleas from the Samourai Wallet founders and a conviction against Storm. Jonathan Schmalfeld of the Digital Chamber wrote this result underscores that developer protections must be codified into law.
✅ Follow BITNEWSBOT on Telegram, Facebook, LinkedIn, X.com, and Google News for instant updates.
