What if the Department of Justice prosecuted you under legal theories that did not exist at the time of your conduct? That is not a hypothetical. It is the reality of early crypto enforcement — and a new white paper issued by Former Feds Group and Frederic E. Teboul, with a foreword by Alan Dershowitz, documents the constitutional crises embedded in the government’s crypto crackdown.
At its core, this is not about cryptocurrency. It is about the Constitution. When the government rewrites rules retroactively, seizes assets, and ignores due process, every American’s rights are at risk. The BitClub Network prosecution is a chilling example of that overreach — and the paper demands accountability for legacy convictions that cannot be squared with today’s standards.
The BitClub Network case
Consider a peripheral promoter in a mining pool. No fraud proven at the individual level — yet the DOJ brought felony charges using theories invented years later. That is the story of Jobadiah Weeks: convicted under unsettled law, now serving time while larger participants in the ecosystem faced lesser or no criminal exposure. The prosecution of Jobadiah Weeks is not about crypto, Dershowitz writes in the foreword. It is about whether due process and fair notice remain the cornerstones of American justice.
The government’s overbroad conspiracy liability swept in peripherals like Weeks despite the absence of any prior mining-pool prosecutions, inconsistent treatment of contemporaneous ICOs, and post-facto expansion of enforcement theories. The result was years of discovery disputes, speedy-trial abuses, and asset seizures that crippled the defense — a systemic failure with grave constitutional implications.
Key findings
Retroactive prosecution
Cases like BitClub relied on post-conduct securities classifications and novel digital-asset theories, breaching the Fifth Amendment’s fair-notice requirement. If the rule of law bends for one defendant, it breaks for all. As Dershowitz warns: shortcuts metastasize.
The Blanche Memo
The DOJ’s own 2025 Blanche Memo now admits what the paper argues: no charges in novel digital-asset matters without clear authority and Main Justice approval. By today’s standards, BitClub should never have been brought. Yet defendants remain in prison. The paper calls for vacating these unconstitutional convictions.
Selective enforcement
The disparity is stark. Tezos raised $232 million and paid a civil fine. EOS raised $4 billion with no criminal charges. Ripple, Ethereum, and BitConnect resolved through settlements or lesser sanctions. BitClub peripherals faced felonies. The paper asks why — and what unchecked discretion costs the rule of law.
Regulatory vacuum and post-facto liability
From 2009 through 2017, the digital-asset space operated in a regulatory vacuum. Bitcoin launched in 2009 with little federal attention. FinCEN issued guidance in 2013. The SEC’s DAO Report arrived in 2017. But the DOJ had no criminal policies for mining pools until after early prosecutions were already underway. Fair notice was absent. Participants were punished for innovating in the unknown.
The paper traces how the DOJ prosecuted anyway — using broad conspiracy nets, ignoring evolving blockchain analytics, and failing to account for global regulatory clarity. Post-2021, the department has signaled a shift toward restitution and recalibration. But early cases ignored those priorities, and process failures compounded the constitutional injury.
Executive summary
Justice cannot stop with policy reforms for the future. The paper demands corrective action for past cases: vacate legacy convictions, release the imprisoned, and provide restitution for lost time and seized assets. Anything less ignores the Constitution. Every day these convictions stand, due process is ignored — not only for crypto defendants, but for every American who depends on fair notice and equal treatment under law.
The injury is not confined to individual defendants. When those rights fall for one, they fall for all. Crypto tested the margins of the rule of law. The paper argues we failed — and that reform can restore it.
Recommendations
- DOJ: Require Main Justice review for all novel digital-asset prosecutions; apply the Blanche Memo’s retroactivity principles to legacy convictions.
- IRS: Issue clear tax guidance for mining, staking, and token transactions — eliminating post-hoc criminal exposure for conduct undertaken without notice.
- SEC: End enforcement-by-regulation; provide prospective rulemaking before criminal referrals.
- FinCEN: Harmonize guidance across agencies to prevent conflicting signals that prosecutors exploit retroactively.
- Courts: Enforce Speedy Trial Act limits and scrutinize asset seizures that disable defense preparation.
Broader stakes
If crypto prosecutions could ignore the Constitution, what comes next — artificial intelligence, biotechnology, or the next frontier technology? The rule of law is timeless. This paper exposes how fear drives overreach, drawing parallels to earlier eras of expanded executive power. It is policy analysis, not relitigation: authors Bradford Geyer, a former DOJ prosecutor, and Frederic E. Teboul identify systemic vulnerabilities to strengthen safeguards for the future and correct injustice in the past.
The full white paper — including the complete foreword by Alan Dershowitz, the BitClub case study, and the cross-agency reform blueprint — is available at this link. The original announcement is also on Substack.
This article is for general informational purposes only and is not legal advice. It does not create an attorney-client relationship.