U.S. DoJ Clarifies Stance on DeFi Developers, Emphasizes Intent Over Code

The U.S. Department of Justice has drawn a clear line in the SAND for Web3 developers, signaling that prosecutions will target bad actors—not those building decentralized platforms without criminal intent. Matthew Galeotti, acting assistant attorney general, underscored this stance at the American Innovation Project Summit, framing it as a balance between innovation and enforcement.

Decentralized protocols that merely facilitate peer-to-peer transactions—and lack custody over user assets—won’t face charges, Galeotti confirmed. The remarks arrive amid heightened scrutiny of privacy tools like Tornado Cash, whose co-founder faces money laundering charges. Yet the DoJ’s position hints at a nuanced approach: code itself isn’t criminal, but its misuse can be.

Privacy advocates and crypto leaders have long argued that punishing developers for user behavior sets a dangerous precedent. The DoJ’s latest guidance suggests a pivot toward prosecutorial discretion, acknowledging the organic demand for decentralized finance while reserving the right to pursue malicious actors.