A late-March court decision has reignited a debate over how far U.S. law reaches into crypto development — and whether recent Justice Department assurances actually protect builders.
What happened: a federal judge dismissed a pre-enforcement lawsuit brought by developer Michael Lewellen, who had asked a court to say plainly whether publishing a crypto-based crowdfunding tool would constitute money transmission. The judge concluded Lewellen had failed to show a credible threat of enforcement and threw the case out. That dismissal is now the focal point for critics who say Washington’s public reassurances don’t translate into clear, binding protection.
Why it matters: developers seek legal certainty before releasing code. Without a clear court ruling or new legislation defining the line between lawful software development and money transmission, builders remain exposed to risk. Peter Van Valkenburgh, executive director of Coin Center, summed up the tension on X: “If the law is so clear why are devs sleeping with one eye open?” He pressed a pointed question at the DOJ: if the legal standard is already clear enough that developers need not fear prosecution, why did the department move to dismiss Lewellen’s case instead of letting the courts set a judicial precedent?
DOJ’s position: Acting Attorney General Todd Blanche used a Bitcoin conference in Las Vegas to emphasize a new prosecutorial focus. Speaking alongside FBI Director Kash Patel and Coinbase chief legal officer Paul Grewal, Blanche said the department is shifting from going after code writers to targeting people who use platforms to commit crime. “A developer who builds software and has no knowledge that a third party is using it for criminal purposes will not face investigation or charges,” he said, adding that he does not want platforms to view the DOJ or FBI as entities that will “just cause them a lot of problems.”
Policy background: Blanche’s remarks reflect a formal change in approach. In April 2025 he issued a memo pledging to end what he called “regulation by prosecution,” instructing prosecutors not to target developers for users’ illegal acts or for regulatory violations the developers were unaware of.
The counterpoint: critics point to past enforcement actions — most notably Tornado Cash, a crypto-mixing service sanctioned by the Treasury’s Office of Foreign Assets Control in August 2022 (sanctions later lifted in November 2024) — as evidence that prosecution-led pressure has been real and consequential. That history helps explain why many in the crypto community want either a court to set clear legal boundaries or Congress to pass statute-level guidance.
Bottom line: Acting DOJ officials are offering stronger verbal protections for builders, and the agency says its tactics have changed. But until that stance is tested and fixed in law or case law, developers will likely continue to operate with uncertainty about where the line is drawn.
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