DOJ Shifts Stance Code Without Criminal Intent No Longer Prosecuted

The U.S. Department of Justice (DOJ) has announced a significant shift in its approach to prosecuting decentralized software developers, stating that writing code without criminal intent will no longer be treated as a federal offense. The policy change, articulated by Acting Assistant Attorney General Matthew R. Galeotti during a speech on August 5, 2025, aims to clarify legal boundaries for developers in the decentralized finance (DeFi) and blockchain ecosystems [1].

Under the new guidance, the DOJ will no longer pursue criminal charges against developers under Section 1960(b)(1)(C) unless there is clear evidence of intentional wrongdoing. This marks a departure from previous enforcement strategies that often scrutinized developers whose tools were later misused by third parties. Galeotti emphasized that developers should not face legal consequences for how others use their software, provided the original intent and design were legitimate [1].

The policy update comes in the wake of the Tornado Cash case, where co-founder Roman Storm was recently convicted for his role in running an unlicensed money transmission service. Galeotti clarified that the DOJ’s new stance ensures that such legal actions will not be applied to genuinely decentralized protocols that facilitate peer-to-peer transactions without custodial control [4].

Industry stakeholders have broadly welcomed the DOJ’s move, which is expected to reduce the regulatory uncertainty that has long hindered innovation in the DeFi space. Matthew Galeotti noted that “well-intentioned innovators need not worry about losing their freedom,” a sentiment echoed by developer advocacy groups who view the shift as a step toward a more supportive regulatory environment [2].

This change may encourage increased venture capital investment in blockchain technologies, particularly in Ethereum-based projects, which have already seen a 90.96% price increase over the past 60 days [6]. The DOJ’s revised stance also supports the broader adoption of non-custodial financial systems by removing a major legal barrier for developers [5].

While the DOJ is not abandoning all crypto-related prosecutions, it has signaled a more targeted approach—focusing on those who knowingly facilitate illegal activities such as fraud, money laundering, or sanctions violations. The updated policy emphasizes intent as the central criterion for criminal liability, offering clearer guidelines for developers to operate within the legal framework [3].

Overall, the DOJ’s updated guidance is seen as a pivotal development for the future of decentralized innovation, offering greater certainty and encouraging the continued growth of the DeFi ecosystem.

Source:

[1] Department of Justice (.gov) (https://www.justice.gov/opa/speech/acting-assistant-attorney-general-matthew-r-galeotti-delivers-remarks-american)

[2] AInvest (https://www.ainvest.com/news/regulatory-risk-mitigation-defi-doj-policy-shifts-reshape-developer-liability-investment-viability-2508/)

[3] Yahoo Finance (https://finance.yahoo.com/news/tornado-cash-roman-storm-faces-220425763.html)

[4] Crypto Briefing (https://cryptobriefing.com/doj-shipping-code-not-a-crime-crypto-open-source/)

[5] Cointelegraph (https://cointelegraph.com/news/justice-department-policies-writing-code-roman-storm-retrial)

[6] Coinpedia (https://coinpedia.org/news/u-s-doj-says-defi-developers-will-not-be-targeted-without-criminal-intent/)