#Encryption Project Sues Justice Department#

Crypto project developer Michael Lewellen has sued the U.S. Department of Justice, seeking a court ruling that his upcoming crypto crowdfunding project, Pharos, does not violate the Unlawful Money Transmission Act. Lewellen argues that the Justice Department's prosecutions of Tornado Cash and Samourai Wallet developers violate the First and Fifth Amendments of the U.S. Constitution and contradict the Department's previous public statements that developers should not be treated as money transmitters. He emphasizes that Pharos only charges a fixed fee for successful projects and does not control transaction funds, and therefore should not be classified as a money transmitter. Lewellen's lawsuit reflects concerns within the crypto industry about uncertainty and overregulation by the U.S. government, as well as anxiety over the lack of a clear legal framework. Such preemptive lawsuits are becoming increasingly common in the absence of clear regulations and a legal framework for cryptocurrencies.