Open-Source Developers Get Backing in DOJ Legal Battle

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Written by Aaron S.,

Editor-In-Chief

Last Updated: July 09, 2025

Key Takeaways

A group of crypto advocacy organizations said the DOJ mislabels open-source coders as unlicensed money services;
Filing argued that publishing code is not the same as handling others’ funds;
The DOJ’s approach could prompt US developers to halt or relocate their projects abroad.

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A group of crypto advocacy organizations has joined a legal effort to stop the unfair treatment of open-source software creators.

On July 7, Paradigm, the Blockchain Association, the DeFi Education Fund, the Crypto Council for Innovation, and others filed a court document supporting developer Michael Lewellen in his lawsuit against the US Department of Justice (DOJ).

Lewellen built a decentralized finance (DeFi) program that does not hold or control user funds. He currently faces charges under a federal law, Section 1960 of Title 18, which was written to regulate unlicensed money businesses.

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The group argued that the DOJ is overextending the law by treating those who only create and share code as if they are actively transferring money on behalf of others.

The filing argued that posting open-source code does not qualify as "money transmitting". The group compared the DOJ’s position to blaming a frying pan maker for what someone cooks in it.

The brief stated that someone cannot "transmit" or "transfer" money for someone else without first having control of that money.

According to the filing, the DOJ’s actions have made developers hesitant to build privacy tools or new DeFi projects in the United States. The group warned that if this continues, many developers will either stop their work or move to other countries to avoid possible charges.

The organizations have asked the court to let Lewellen’s case move forward and to make a clear ruling that open-source publishing is not illegal under current laws.

Recently, Paradigm submitted a legal brief in support of Roman Storm, one of the co-founders of Tornado Cash. What did the company say? Read the full story.