DOJ Declares ’Code Alone Is Not a Crime’ - Landmark Ruling Reshapes Crypto Privacy Landscape

Federal prosecutors draw critical line in the sand after Tornado Cash case—code isn't criminal, but its misuse is.

Privacy tech gets legal shield

The Department of Justice's latest stance offers unprecedented protection for developers building privacy-focused tools. No longer can writing code itself be treated as criminal activity—a massive win for innovation in decentralized finance.

Enforcement targets behavior, not technology

Prosecutors will now focus on demonstrable criminal intent rather than the tools themselves. This clarification comes after years of regulatory ambiguity that had developers walking on eggshells—finally, some common sense in Washington.

Market responds with relief rally

Privacy tokens and development teams breathe collective sigh of relief as legal uncertainty clears. Because nothing makes TradFi regulators more uncomfortable than code they can't control—unless it's profits they can't tax.

The ruling doesn't give blanket immunity but establishes crucial boundaries: build tools, not criminal enterprises. The code is neutral—the hands that wield it make all the difference.

DOJ Signals Shift in Approach

Weeks after Tornado Cash co-founder Roman Storm was convicted on a money transmission charge, a senior Department of Justice official indicated that prosecutors WOULD not pursue similar cases in the future. Speaking at the American Innovation Project (AIP) Summit in Jackson, Wyoming, acting assistant attorney general Matthew Galeotti said that software developers should not be criminally liable for the actions of users who misuse their code.

Galeotti’s comments came as he addressed industry concerns about prosecutorial overreach against developers of decentralized tools.

Concerns Over Developer Accountability

Crypto advocacy groups have long argued that holding developers responsible for third-party misuse of open-source protocols threatens innovation. Amanda Tuminelli, executive director of the DeFi Education Fund, welcomed the DOJ’s remarks, saying the statement aligned with what the sector had been “advocating for years.”

The remarks follow a DOJ memo issued in April, prior to Storm’s trial, which outlined that the department would no longer pursue cases targeting crypto mixers based solely on user behavior or unintentional regulatory violations.

The Tornado Cash Case

Roman Storm, co-founder of privacy protocol Tornado Cash, was convicted in New York earlier this month of operating an unlicensed money transmitting business. He faced additional charges of money laundering and sanctions evasion, but jurors failed to reach a verdict on those counts. Prosecutors may seek a retrial.

The trial centered on 18 U.S.C. 1960, a federal statute covering unlicensed money transmission. Galeotti clarified that new charges under this law would not be approved where protocols are “truly decentralized” and operate without custody or control of user assets. However, he emphasized that cases involving clear criminal intent would still be subject to prosecution.

Industry Fallout

Storm’s conviction has raised alarm across the crypto industry, with critics arguing that the money transmission charge mischaracterizes Tornado Cash’s decentralized design. Supporters said the verdict could discourage developers from building privacy-preserving applications, despite their legitimate uses.

Prosecutors countered that Storm maintained meaningful control over Tornado Cash, challenging claims of complete decentralization. The protocol, originally created to enhance privacy on Ethereum, became a tool for laundering over $500 million in stolen crypto in 2022, including funds linked to North Korean hackers.

Looking Ahead

It remains unclear whether Galeotti’s clarification would have shielded Storm from prosecution. His legal team has confirmed plans to appeal the conviction, while the industry continues to watch closely for precedent-setting implications.

The DOJ’s revised stance signals a potential recalibration of its enforcement strategy. By distinguishing between intentional misconduct and the unintended misuse of open-source software, the department appears to be drawing new boundaries around developer liability in the crypto space.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.