DOJ Says It Won’t Target Developers of Decentralized Crypto Apps Without Criminal Intent

2 mins mins

Key Points:

DOJ confirms code creation without criminal intent will not be prosecuted as money transmission.
Justice Department disbands its crypto enforcement team as enforcement stance shifts.
SEC drops multiple cases against crypto firms, signaling broader regulatory change.

The U.S. Justice Department announced it will not prosecute developers who build decentralised crypto applications without criminal intent. Acting Assistant Attorney General Matthew Galeotti confirmed the change during remarks at a Wyoming crypto summit.

The department said it would move away from charging software developers under money transmitter rules. Instead, it will focus on cases involving intent to facilitate illegal activities.

Money transmitter laws apply to traditional firms such as Western Union and Venmo, which must register and conduct compliance checks. These requirements have long been a controversial issue for decentralized exchanges that often lack oversight of transactions.

This announcement signals the latest step in a broader shift of U.S. policy toward digital assets. Regulators are easing enforcement actions following years of strict oversight.

Recent Cases and Regulatory Context

The shift follows the recent conviction of Tornado Cash co-founder Roman Storm for conspiracy to operate an unlicensed money transmission business. The jury, however, could not agree on money laundering and sanctions charges, leaving parts of the case unresolved.

Critics argued that Storm had only written code for Tornado Cash, raising concerns about prosecuting developers for software creation. Anti-corruption advocates countered that mixing services enable laundering of illicit funds and therefore require regulatory scrutiny.

The Tornado Cash case highlighted the tension between innovation and compliance in decentralized finance. It also fueled debate on how far liability should extend to protocol developers.

The Justice Department under President Donald Trump has significantly changed its stance from the prior administration. Authorities have disbanded the specialized crypto enforcement team as part of this pivot.

At the same time, the U.S. Securities and Exchange Commission has dropped several lawsuits against crypto firms and executives. These actions underscore a wider recalibration of regulatory policy toward the industry.

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