Crypto Crackdown Refocused: FBI, DOJ Zero In On Bad Actors, Not Code Creators

A federal judge dismissed a lawsuit in late March that sought clarity on whether publishing a crypto-based crowdfunding tool counted as money transmission — and that dismissal is now at the center of a debate over whether recent statements from the Justice Department mean anything in practice.

Developers Still Waiting For Hard Answers

The case was brought by developer Michael Lewellen, who wanted a court to tell him plainly whether his software crossed any legal lines before he published it.

The court said no credible enforcement threat had been shown and threw it out. Critics say that outcome exposes a contradiction in the government’s current position.

Peter Van Valkenburgh, executive director of Coin Center, acknowledged the tone from Washington has improved.

But he pressed 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 dismissed rather than let the courts define the rules?

“If the law is so clear why are devs sleeping with one eye open?” Van Valkenburgh wrote on X.

His frustration points to a gap between reassuring language from officials and binding legal protection for builders. Without a court ruling or new legislation that spells out the limits, developers remain in uncertain territory.

What The Acting AG Actually Said

Speaking at a Bitcoin conference in Las Vegas Monday alongside FBI Director Kash Patel and Coinbase’s chief legal officer Paul Grewal, Acting Attorney General Todd Blanche said the government has fundamentally shifted how it pursues financial crime in the crypto space.

The focus, he said, is now on the people using platforms to break the law — not the people who wrote the code.

Blanche was direct: a developer who builds software and has no knowledge that a third party is using it for criminal purposes will not face investigation or charges.

That position, he said, marks a clear break from how cases were handled before the Trump administration took over.

“I do not want any platform to look at the Department of Justice or the FBI as somebody who’s going to just cause them a lot of problems,” he said.

The groundwork for that shift was laid in April 2025, when Blanche released a memo committing the DOJ to ending what he called “regulation by prosecution.”

Under that framework, developers are not to be targeted for the actions of their users or for regulatory violations they were unaware of.

The new stance contrasts sharply with how the government handled Tornado Cash, the crypto mixing service that authorities accused of enabling money laundering and sanctions evasion.

The Office of Foreign Assets Control sanctioned the platform in August 2022. Those sanctions were later lifted in November 2024.

Featured image from Unsplash, chart from TradingView