A federal judge in late March dismissed a lawsuit seeking to clarify whether posting a crypto-based crowdfunding tool qualifies as a money transfer — and that rejection is now at the center of a debate over whether the Justice Department’s recent statements mean anything in practice.
Developers are still waiting for concrete answers
The case was brought by developer Michael Lewellen, who wanted a court to clearly tell him whether his software crossed any legal boundaries before releasing it.
The court said no credible threat of law enforcement had been demonstrated and dismissed it. Critics say this result reveals a contradiction in the government’s current position.
Peter Van Valkenburgh, executive director of Coin Center, acknowledged that Washington’s tone had improved.
But he asked a pointed question: If the legal standard is already clear enough that developers have nothing to fear, why did the Justice Department fight to have Lewellen’s case thrown out rather than letting the courts set the rules?
Acting AG Todd Blanche was asked at Bitcoin Vegas about the fear that developers could be sued simply for writing code.
His response:
“The basic principle is that if you develop software, if you are a coder, if you are part of this process and you are not the…
– Peter Van Valkenburgh (@valkenburgh) April 27, 2026
“If the law is so clear, why are developers sleeping with one eye in mind? » Van Valkenburgh wrote on X.
His frustration highlights a gap between the reassuring language of officials and the binding legal protection for builders. Without a court ruling or new legislation clarifying the limits, developers remain in uncertain territory.
What the interim AG actually said
Speaking at a Bitcoin conference in Las Vegas on Monday alongside FBI Director Kash Patel and Coinbase General Counsel Paul Grewal, Acting Attorney General Todd Blanche said the government has fundamentally changed the way it pursues financial crime in the crypto space.
The focus, he said, is now on the people who use the platforms to break the law – not the people who wrote the code.
Blanche was blunt: a developer who creates software and is unaware that a third party is using it for criminal purposes will not be investigated or charged.
This position, he said, marks a sharp departure from the way business was handled before the Trump administration took power.
“I don’t want any platform to view the Department of Justice or the FBI as someone who’s going to cause them a lot of problems,” he said.
Image: iStock
The groundwork for this change was laid in April 2025, when Blanche issued a memo urging the DOJ to end what it called “regulation by prosecution.”
As part of this, developers should not be targeted for the actions of their users or for regulatory violations that they were unaware of.
Tornado Cash cases weigh on the debate
The new stance stands in stark contrast to how the government has handled Tornado Cash, the crypto mixing service that authorities accuse of enabling money laundering and sanctions evasion.
The Office of Foreign Assets Control sanctioned the platform in August 2022. These sanctions were later lifted in November 2024.
Featured image from Unsplash, chart from TradingView
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