U.S. DoJ Declares DeFi Developers Safe From Prosecution Without Criminal Intent

Federal prosecutors draw line in sand—no targeting of decentralized finance builders acting in good faith.

The Regulatory Shift

Justice Department officials clarify stance: mere code development doesn't constitute criminal activity. Enforcement focuses solely on provable malicious intent—money laundering, fraud, or deliberate sanctions evasion. The move follows years of industry uncertainty about legal boundaries in permissionless protocols.

Building Without Fear

Developers breathe sigh of relief as DoJ acknowledges technological neutrality. Open-source contributors get explicit protection—as long as they're not actively facilitating crimes. The guidance specifically distinguishes between creating tools and knowingly enabling illicit activity.

Wall Street's Ironic Twist

Traditional finance giants still can't decide whether to regulate DeFi into oblivion or just buy the whole space outright—typical hedge fund indecision meets disruptive technology. Meanwhile, builders keep shipping while bankers debate their relevance.

New era dawns for crypto innovation: code isn't crime unless intended that way.

The United States Department of Justice has stepped up its legal clarity for the Web3 and digital assets space. On Thursday, Matthew Galeotti, acting assistant attorney general of the Department of Justice’s Criminal Division, said that Web3 developers will not be prosecuted for any wrongs made by users of their DeFi platforms.

Galeotti, who was speaking at the American Innovation Project Summit in Jackson Wyoming, highlighted that the DoJ will focus on rooting out bad actors while enabling the good players. Moreover, the DoJ admitted that there is an organic demand for web3 protocols and digital assets, thus the need to protect the developers from user misuse.

“Where the evidence shows that software is truly decentralised and solely automates peer-to-peer transactions, and where a third-party does not have custody and control over user assets, new charges against a third party will not be approved,” Galeotti noted. 

What Does the DOJ’s Take Mean for Tornado Cash Developers?

The DoJ’s comments follow the recent conviction of Tornado Cash co-founder Roma Storm on charges of conspiracy to operate an unlicensed money transmitting business. Roman, who is preparing to proceed to the Court of Appeals, is being prosecuted for enabling bad actors to launder money intentionally. 

However, pro-crypto leaders have argued that privacy is normal and writing code is not a crime. The DoJ’s clarification will play a crucial role in the mainstream development of web3 protocols, especially fully decentralized platforms.

Most importantly, the DoJ’s clarification marks the end of the Justice Department being used to regulate the crypto industry. 

“For too long, crypto and open source developers in the US have been living under a cloud of doubt. That uncertainty ends today, with an emphatic statement from the DOJ that shipping code is not a crime,” Katie Biber, CLO Paradigm, noted.