Over the last few years, the sector of Web3 and digital assets in the U.S. has experienced rapid expansion. The influx of institutional investors into the cryptocurrency market has notably influenced the political perspective on the crypto industry. Furthermore, within a week, the country will have its first pro-crypto president, which is expected to reshape the Web3 terrain for the subsequent four years.
Yet, the consequences of the Biden administration’s actions to regulate cryptocurrencies will persist until their final day in office. Notably, the U.S. Securities and Exchange Commission (SEC) and other relevant agencies have been taking strategic legal steps against the Web3 sector in recent times.
Michael Lewellen Fights for Web3 Freedom
Michael Lewellen, an esteemed authority on cybersecurity within the cryptocurrency and Web3 realm, has initiated a legal action against Merrick Garland, the current U.S. Attorney General, in his official capacity, due to efforts aimed at penalizing Web3 developers for releasing software without first securing a money transmitter license.
Lewellen plans to release a Web3-based protocol and interface, dubbed Pharos, aimed at simplifying crowdfunding initiatives for charities and various projects. Unfortunately, Lewellen is unable to move forward with this project, even with potential users on board, due to the unclear legal landscape.
The U.S. government is urging Lewellen to get a money transmitter license so they can release and manage the Pharos protocol. However, the Pharos platform is not a custodial service, meaning the users have control over their digital assets.
Consequently, Lewellen is unable to disclose financial information to the required government entities, unlike typical financial institutions, as he lacks access to the individual user accounts. However, Lewellen plans to charge users for utilizing his software, without having direct control over their funds.
If an individual uses a Ford truck to transport their money from one location to another, it’s important to understand that Ford itself does not move or transfer the money. This remains true regardless of whether Ford built the truck with additional safety features specifically for moving cash.
The lawsuit argues that the prosecution of Tornado Cash and Samourai Wallet creators is deemed unconstitutional and a hindrance to innovation. Furthermore, Lewellen asserts that creating and disseminating Web3 software falls under the umbrella of free expression, a right enshrined in the U.S. Constitution.
Bigger Picture
Under the incoming Donald Trump administration, it’s anticipated that numerous cryptocurrency cases in the United States will be resolved. The selection of pro-crypto SEC chair Paul Atkins as a potential replacement for Gary Gensler suggests a potential change in the approach to Web3 regulatory reform.
In addition, the United States Congress is working on drafting straightforward regulations for cryptocurrencies, which they aim to implement soon. This move is intended to facilitate easy adoption of these digital assets by both institutional investors and individual traders.
Contrarily, securing victory in the U.S. doesn’t ensure similar results across significant regions like Europe and the UK, primarily. This implies that Lewellen’s lawsuit against the U.S. Department of Justice is merely the initial step towards freedom in Web3 development and software publishing on a global scale.
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2025-01-17 01:45