Crypto Giants Clash With DOJ in High-Stakes Battle Over Developer Code Crackdown
Crypto firms are pushing back hard against the Department of Justice's latest move to regulate developer code—and the fight could redefine privacy in Web3.
The Backdoor Brouhaha: The DOJ wants access to encryption protocols, claiming national security concerns. Developers call it a Trojan horse for surveillance.
Code = Speech?: Legal teams argue GitHub commits are protected under the First Amendment. Prosecutors counter that anonymity fuels illicit transactions—conveniently ignoring Wall Street’s legacy of fines-for-permission laundering.
Why It Matters: Lose this battle, and every blockchain from Bitcoin to BNB could become a government-readable ledger. Win, and DeFi keeps its teeth while TradFi regulators seethe.
The irony? Banks spend billions lobbying against crypto while their own systems get hacked monthly. Priorities.
A coalition of crypto advocacy groups accuses the US Department of Justice (DOJ) of misusing a law provision, backing Michael Lewellen’s case against the federal agency. On July 7, a crypto investment company, Paradigm, joined the alliance and filed an amicus brief, challenging the DOJ’s attack on software developers publishing open source code.
Crypto Firm Coalition Against DOJ
Paradigm reported on Monday that it has joined forces with— DeFi Education Fund, alongside the Blockchain Association, Crypto Council for Innovation, the Digital Chamber, the Solana Policy Institute, the Bitcoin Policy Institute, and the Uniswap Foundation— to support plaintiff, Michael Lewellen.
Lewellen, the developer who created a non-custodial crypto protocol and wanted to make it publicly available, merely published the code, which is not a money transmission, contrary to what the DOJ accused him of.
Why the Crypto Firms are Fighting Against the DOJ?
The crypto group coalition called the Department of Justice’s prosecution unfair and accused it of misusing section 1960 of the Title 18 of the US Code. In their filing, the coalition reported that the government is actively prosecuting P2P crypto software, even when the developers are publishing open-source software.
Developers who followed the rules, consulted lawyers, and relied on government guidance are also finding themselves at the risk of indictment or are facing trials like Roman Storm. Emphasizing the wrongdoing of the DOJ, Paradigm stated–
“We filed the brief because the government’s position is not just wrong on the law; it threatens the future of neutral crypto infrastructure in the United States and will send innovation fleeing overseas.”
Urging the Government to Maintain Clarity in Laws
The crypto group coalition urged the government to give more clarity on the DOJ laws before prosecuting. Without clarity, developers will keep facing penalties and imprisonment, halting innovation in the US. The amicus brief submitted by the coalition defines unlicensed illegal money transmitting, which, according to the crypto firms, was not committed by Lewellen.
Final Thought
The crypto group coalition believed that people WOULD lose faith in the US law if it does not provide clarity before executing charges. It will also confuse the developers to understand what falls under legal circumstances and what doesn’t. If this harsh and illogical regime continues, many developers will start to flee overseas to continue their innovative work.
