DOJ Official Signals Major Policy Shift on Cryptocurrency Developer Prosecutions

The Department of Justice has signaled a significant change in its approach to prosecuting cryptocurrency developers, with Acting Assistant Attorney General Matthew Galeotti delivering remarks that could reshape the regulatory landscape for blockchain technology creators.

Galeotti's Landmark Speech at Wyoming Summit

Speaking at a cryptocurrency summit in Wyoming organized by the American Innovation Project, Matthew Galeotti, acting assistant attorney general for the Justice Department's criminal division, outlined new enforcement policies that protect well-intentioned cryptocurrency developers from federal prosecution.

The DOJ official made clear statements regarding the department's evolving stance on crypto-related cases, emphasizing that developers working in good faith should not fear criminal liability for their code contributions.

Key Policy Changes Announced

Protection for Code Contributors

Galeotti confirmed during his remarks that "merely writing code, without ill-intent, is not a crime." This statement represents a fundamental shift in how the Justice Department approaches cryptocurrency development cases.

The acting assistant attorney general specifically addressed concerns about prosecution under unlicensed money transmitter statutes, stating that the DOJ would not press charges unless prosecutors have evidence that defendants knew of specific legal requirements and willfully violated them.

Technology-Neutral Enforcement Approach

Galeotti stressed that the law is technology-neutral, explaining that while tools can be misused, those misusing them should be prosecuted, but developers acting in good faith should not face charges.

This policy clarification extends protection to developers working on truly decentralized protocols and ensures that contributing code alone will not subject developers to criminal liability without evidence of specific criminal intent.

Impact on Roman Storm Case

The timing of Galeotti's remarks carries particular significance for Roman Storm, the Tornado Cash co-founder who was found guilty on one felony count in August. Storm may be closer to avoiding a possible retrial on additional charges following the Justice Department official's statement.

Background on Storm's Legal Battle

Roman Storm faced charges related to his work on Tornado Cash, a cryptocurrency mixing protocol. The Trump administration had previously dropped a single charge related to operating an unregistered money transmitting business but maintained charges accusing the developer of operating Tornado Cash while knowing some users were processing funds linked to criminal activity.

Potential Retrial Implications

The DOJ official's remarks suggest the department would be changing its approach to certain enforcement cases involving crypto and blockchain technology. This policy shift could significantly impact Storm's potential retrial proceedings.

Industry Response to Policy Announcement

Immediate Reaction

On-site reporters described a powerful reaction to the speech, with the crowd giving a standing ovation and long-term industry veterans becoming emotional. Quotes like "well-intentioned innovators do not have to fear for their liberty" directly targeted the pro-crypto audience present.

Legal Community Perspective

Coinbase's Chief Legal Officer Paul Grewal noted that Galeotti had said that, without specific intent, contributing code alone will not subject any developer to liability under the relevant legal provisions.

Historical Context and Policy Evolution

Previous Biden Administration Approach

Under the Biden administration, federal prosecutors in Manhattan pursued more aggressive enforcement actions against cryptocurrency developers. This new stance marks a clear departure from previous prosecutorial strategies.

April DOJ Memo Precedent

In a four-page memo published in April, the department indicated it no longer intends to pursue cases charging crypto mixers "for the acts of their end users or unwitting violations of regulations."

Implications for Cryptocurrency Industry

Developer Protection Framework

The new policy framework provides clearer guidance for cryptocurrency developers regarding potential criminal liability. By establishing that good-faith code contribution does not constitute criminal activity, the DOJ has created a more predictable regulatory environment for blockchain innovation.

Enforcement Boundaries

Galeotti assured the audience that the DOJ would not use federal criminal statutes to create new regulations for the cryptocurrency industry, ensuring developers would not face criminal prosecution for unintentional regulatory violations.

Future Enforcement Strategy

Even-Handed Approach

The Justice Department will pursue "even-handed enforcement" and would not treat writing or contributing code as a crime without evidence of criminal intent.

Targeted Prosecution Focus

The new policy suggests that future prosecutions will focus on individuals and entities that demonstrate clear criminal intent rather than developers who contribute to open-source projects without malicious purpose.

Market and Legal Analysis

Regulatory Clarity Benefits

This policy clarification addresses longstanding concerns within the cryptocurrency development community about potential criminal liability for legitimate blockchain programming activities.

Impact on Innovation

By providing clearer boundaries around what constitutes criminal activity in cryptocurrency development, the DOJ's new stance may encourage continued innovation in the blockchain sector while maintaining appropriate enforcement against actual criminal conduct.

Conclusion

Matthew Galeotti's remarks at the Wyoming cryptocurrency summit represent a watershed moment for Department of Justice policy regarding cryptocurrency developer prosecutions. The announcement provides crucial clarity for blockchain developers while maintaining the government's ability to pursue cases involving genuine criminal intent.

This policy shift, particularly in the context of the Roman Storm case, suggests a more nuanced approach to cryptocurrency regulation that distinguishes between legitimate development activities and criminal conduct. The industry response indicates significant relief among cryptocurrency professionals who had previously operated under uncertainty regarding potential federal prosecution for code contributions.

The long-term implications of this policy change will likely shape how cryptocurrency innovation proceeds in the United States, potentially encouraging more developers to contribute to blockchain projects without fear of unintended criminal liability.

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