The U.S. Department of Justice has signaled a shift in its approach, indicating it will scale back enforcement actions against software developers. This marks a departure from its years-long practice of targeting industry participants.
Speaking at the American Innovation Project summit on August 21, Acting Assistant Attorney General Matthew Galeotti, head of the DOJ’s Criminal Division, stated that authorities will no longer pursue developers for the misuse of their applications by malicious actors.
Galeotti emphasized that while prosecutors remain committed to combating bad actors in the digital asset space, developers who create tools with neutral, legitimate intent should not fear legal repercussions.
“Our view is that merely writing code, without ill intent, is not a crime,” he said. His remarks follow an April memorandum from Deputy Attorney General Todd Blanche, which urged prosecutors to end their “Regulation by Enforcement” approach toward the industry.
Previously, teams such as Tornado Cash and Samourai Wallet faced charges including unlicensed money transmission and money laundering, effectively criminalizing open-source development by equating code publication with financial crime.
The new approach seeks to prevent prosecutors from bringing unfounded charges against developers.
“Where software is genuinely decentralized, automates only peer-to-peer transactions, and no third party has custody or control over user assets, new money transmission charges against a third party will not be approved,” Galeotti added.
Implications of the DOJ’s New Approach for the Crypto Industry
For developers, the acting assistant attorney general’s message is clear. Software that is neutral and non-custodial—simply facilitating transactions—should not trigger prosecution, as long as there is no intent to support illegal activity.
At the same time, Galeotti emphasized that fraud, money laundering, sanctions evasion, and scams remain top enforcement priorities. Developers who deliberately create tools to enable criminal activity could still face serious charges, including money laundering, conspiracy, or aiding and abetting. In such cases, prosecutors will focus on proving intent, rather than penalizing the mere act of publishing code.
Beyond the immediate implications, a larger question remains: what does this new approach mean for past prosecutions?
Tornado Cash and Samorai Wallet
Although Galeotti did not reference specific cases, the timing of the DOJ’s shift is significant. Earlier this month, Tornado Cash co-founder Roman Storm was convicted on conspiracy charges related to unlicensed money transmission. Prosecutors had originally filed charges in 2022, alleging that the protocol enabled illicit financial activity by sanctioned entities.
Storm and his co-developers maintained that they did not knowingly facilitate criminal activity, emphasizing that the protocols were designed to protect user privacy and, once deployed, operated autonomously beyond their control. Nevertheless, prosecutors pursued convictions, leading to the imprisonment of one co-founder last year.
Similarly, the founders of Samourai Wallet recently pleaded guilty to operating an unlicensed money transmitting business, following DOJ allegations that its mixing features were deliberately designed to launder criminal proceeds. Critics within the industry have long argued that such high-profile cases set a dangerous precedent, stifling innovation and exposing developers to legal risk.
While it is still unclear whether the DOJ’s new policy will affect past prosecutions, it offers a clearer path forward, signaling that well
