Crypto Groups Defend Open-Source Code

[umair]

Hey everyone,

There’s a major legal development happening that could impact the future of open-source development in crypto. Several prominent crypto advocacy groups, including Paradigm, the Blockchain Association, and the DeFi Education Fund, are backing a federal lawsuit that challenges how the U.S. Department of Justice is interpreting money transmission laws.

The issue centers around a developer named Michael Lewellen, who helped create a non-custodial DeFi protocol. He wants to make the code public, but under the DOJ’s current interpretation of the law, he could be prosecuted just for publishing open-source software. Specifically, the DOJ is using a broad reading of Section 1960, which traditionally targets unlicensed money transmitters. These groups argue that this approach overreaches and could classify developers as criminals simply for writing and sharing code.

The advocacy groups have filed an amicus brief in support of Lewellen, saying that creating tools shouldn’t be treated the same as facilitating transactions. They compare it to prosecuting a frying pan manufacturer for how someone uses the pan—it just doesn’t make sense. If this interpretation stands, it could have a chilling effect on privacy tools and decentralized finance innovation in the U.S.

Their concern is clear: developers may be forced to either stop working on privacy-related tools or move their efforts outside the country altogether. This comes on the heels of other high-profile DOJ actions against projects like Tornado Cash and Samourai Wallet, raising alarm across the industry.

So, what do you think? Is this about protecting users and preventing misuse, or is it an attack on developers and innovation? Should publishing code be treated as a criminal act if it’s non-custodial and open-source?

Curious to hear how others in the space view this—it could shape how we all build going forward.