Blockchain developer Michael Llewellyn has filed a lawsuit against the US Department of Justice, accusing the agency of criminalizing cryptocurrency development through an overly broad interpretation of federal money transfer laws.

The lawsuit filed Thursday seeks to prevent prosecution of decentralized crowdfunding platform Pharos, which it says operates outside the scope of these regulations.

Pharos, built on it Ethereumuses “escrow contracts,” which use smart contracts to hold funds and automatically return funds to donors if funding goals are not met.

The lawsuit describes the platform as non-custodial, meaning Lewellen neither holds nor controls users' funds.

Llewellyn asserts that the DOJ's interpretation of 18 USC §1960 (Blocking Illegal Money Transfers) Incorrectly classifies developers of non-custodial software as unlicensed money transmitters.

The Justice Department's position "betraits its own representations to the public by criminally prosecuting people who deploy non-custodial cryptocurrency software," the lawsuit said.

“Laws against unlicensed money transfers seek to regulate intermediaries in the sensitive business of moving customer money, not technologists who create tools that allow users to move money themselves.” Deposit Countries.

Neither Llewellyn nor the Justice Department responded Decryption Request for comment.

The Department of Justice's broad interpretation of money transfer laws threatens the ability to build freely chirp. “It's not just about Pharos; it's about the future of cryptocurrency innovation in America.”

The lawsuit cites constitutional concerns, stating that the Justice Department's actions violate the First Amendment by criminalizing the publication of software code, and the Fifth Amendment by enforcing the laws in a vague and arbitrary manner.

As Attorney General Merrick Garland prepares to leave office, his successor will inherit the case. The next attorney general, former Florida Attorney General Pam Bondi subject Senate hearing on Wednesday.

The cases of Storm and Rodriguez are central to the legal argument

The lawsuit points to the high-profile cases of Tornado Cash developer Roman Storm and Samourai Wallet co-founders, Keonne Rodriguez and William Lonergan Hill, as evidence that... Alarming expansion Federal authority over non-custodial encryption tools.

In 2023, Storm, along with Roman Semenov, faced charges related to the operation of Tornado Cash, a encoder mixer He is accused of facilitating money laundering and violating penal laws.

While Semenov remains out of custody, Storm is being arrested Try In New York.

In April 2024, Feds Arrested Rodriguez and Hill alleged that their non-custodial bitcoin wallet platform, Samourai Wallet, served as a vehicle for illegal transactions.

Prosecutors allege the wallet facilitated more than $2 billion in suspicious transfers, including more than $100 million linked to illicit markets on the dark web.

Llewellyn's lawsuit builds on these examples, suggesting that such prosecutions criminalize the development of privacy-preserving tools rather than target those who directly engage in illegal activities.