A federal court docket in Texas dismissed the lawsuit filed by developer Michael Lewellen, who sought preventive authorized safety for his non-custodial cryptocurrency software program towards federal cash transmission legal guidelines. The choice was issued yesterday by Chief Decide Reed O’Connor of the Northern District of Texas, leaving unresolved the authorized vacuum going through the crypto business across the growth of non-custodial instruments.
Lewellen had developed Pharos, a software program designed to facilitate donations to charitable crowdfunding campaigns. In January 2025, he filed a lawsuit arguing that registering as a cash transmitter was not possible, on condition that the software program’s privateness options prevented entry to the person info required by legislation. He sought a judicial declaration of legality and an injunction towards the enforcement of guidelines that criminalize working an unlicensed cash transmission enterprise.
O’Connor decided that Lewellen did not display a “substantial and imminent” menace of prosecution and famous that the Division of Justice instances cited by the developer concerned cash laundering, not the mere operation of a crypto software program device.
The case was dismissed with out prejudice, that means Lewellen may refile the lawsuit if circumstances change. The developer responded on X that his authorized staff is exploring choices and referred to as on Congress to move the Blockchain Regulatory Certainty Act (BRCA), which might exempt non-custodial builders from being labeled as cash transmitters.
Supply: https://www.coincenter.org/app/uploads/2026/03/41_Lewellen_re_MTD_3-25-2026.pdf
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