The post Crypto Case Over Money Transmitter Laws Dismissed by US Judge appeared on BitcoinEthereumNews.com.

In brief A federal judge has dismissed a lawsuit by a crypto developer seeking clarity on whether his non-custodial software would violate U.S. money-transmitter laws. The court ruled the developer failed to show a credible threat of prosecution and dismissed the case without prejudice. The case drew support from several crypto advocacy groups, amid broader industry concerns about developer liability. A U.S. federal court has dismissed a lawsuit brought by a crypto software developer seeking a preemptive ruling that his non-custodial crypto donation platform would not violate federal money transmission laws, leaving a key legal question unresolved for the industry. In an opinion issued Wednesday, the U.S. District Court for the Northern District of Texas granted the government’s motion to dismiss the case. It found that the developer, Michael Lewellen, had not demonstrated a credible threat of prosecution under federal law governing unlicensed money-transmitting businesses.  Courts and regulators continue to grapple with how existing financial laws apply to decentralized software and blockchain-based services, particularly when developers create tools that enable users to move funds without relying on a traditional financial intermediary. Lewellen had planned to launch Pharos, a software product designed to facilitate crypto donations to charitable crowdfunding campaigns.  He argued that because the software was non-custodial, he should not be required to register as a money transmitter under federal law. “A non-binding DoJ memo is no substitute for real legal certainty,” Lewellen wrote on X on Wednesday following the ruling. “My lawyers are exploring all options for a path forward.” The court did not rule on whether non-custodial software developers fall within the scope of U.S. money transmitter laws. Instead, the judge said Lewellen lacked standing to bring the case because he could not show that enforcement action against him was likely or imminent. The ruling noted that…

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Filed under: News - @ March 26, 2026 4:27 am