U.S. DoJ Says DeFi Developers Will Not Be Targeted Without Criminal Intent

The United States Department of Justice has stepped up its legal clarity for the Web3 and digital assets space. On Thursday, Matthew Galeotti, acting assistant attorney general of the Department of Justice’s Criminal Division, said that Web3 developers will not be prosecuted for any wrongs made by users of their DeFi platforms.

Galeotti, who was speaking at the American Innovation Project Summit in Jackson Wyoming, highlighted that the DoJ will focus on rooting out bad actors while enabling the good players. Moreover, the DoJ admitted that there is an organic demand for web3 protocols and digital assets, thus the need to protect the developers from user misuse.

“Where the evidence shows that software is truly decentralised and solely automates peer-to-peer transactions, and where a third-party does not have custody and control over user assets, new charges against a third party will not be approved,” Galeotti noted. 

What Does the DOJ’s Take Mean for Tornado Cash Developers?

The DoJ’s comments follow the recent conviction of Tornado Cash co-founder Roma Storm on charges of conspiracy to operate an unlicensed money transmitting business. Roman, who is preparing to proceed to the Court of Appeals, is being prosecuted for enabling bad actors to launder money intentionally. 

However, pro-crypto leaders have argued that privacy is normal and writing code is not a crime. The DoJ’s clarification will play a crucial role in the mainstream development of web3 protocols, especially fully decentralized platforms.

Most importantly, the DoJ’s clarification marks the end of the Justice Department being used to regulate the crypto industry. 

“For too long, crypto and open source developers in the US have been living under a cloud of doubt. That uncertainty ends today, with an emphatic statement from the DOJ that shipping code is not a crime,” Katie Biber, CLO Paradigm, noted.