DOJ will focus on criminal intent over mere code creation, seeking to balance legal accountability with support for innovation.
On August 21, 2025, Acting Assistant Attorney General of the Criminal Division of the Department of Justice (DOJ), Matthew Galeotti, gave a speech at the American Innovation Project Summit in Jackson, Wyo., announcing that DOJ will no longer pursue unlicensed money transmission charges under 18 U.S.C. § 1960 against software developers who create decentralized digital asset trading platforms, and will more generally limit its use of Section 1960 to specific circumstances. As Galeotti put it, “developers of neutral tools, with no criminal intent, should not be held responsible for someone else’s misuse of those tools.” This announcement aims to signal a continued departure from the previous administration’s enforcement approach and to “provide fair notice and clarity” to foster a more innovation-friendly environment in the digital asset industry.
Galeotti emphasized that “[t]he digital asset industry plays an increasingly critical role in innovation and economic development in the United States.” As these assets become more integrated into the US economy, he noted that DOJ is focused on creating a “safe environment for well-intentioned innovators and digital asset holders” that supports responsible innovation while safeguarding national and economic security.
Galeotti stated that his speech was given at the request of Deputy Attorney General Todd Blanche, who issued a memorandum on April 7, 2025, titled “Ending Regulation by Prosecution” (Blanche Memo). In that memo, Deputy Attorney General Blanche stated that DOJ “is not a digital assets regulator” and “will no longer pursue litigation or enforcement actions that have the effect of superimposing regulatory frameworks on digital assets while President Trump’s actual regulators do this work outside the punitive criminal justice framework.”
Galeotti’s speech reiterates the guidance from the Blanche Memo and the Trump administration’s policies that DOJ will reestablish its core role of enforcing the criminal laws as prosecutors, “not regulators and not legislators.” To that end, DOJ will focus its efforts on prosecuting those who knowingly commit crimes — or who knowingly aid and abet the commission of crimes — that threaten US national interests, such as fraud, money laundering, and sanctions evasion. He underscored that “[t]he law is technology neutral” and that “involvement in the digital asset ecosystem should not and will not subject individuals to a different level of scrutiny.”
Heightened Intent Required for Unlicensed Money Transmission Liability
Consistent with the principles of fair notice and due process, Galeotti stated that DOJ will not pursue unlicensed money transmission charges under 18 U.S.C. § 1960(b)(1)(A) (operating without a required State license) or (b)(1)(B) (operating without registering with FinCEN) in cases involving digital assets, unless there is clear evidence that a defendant knew of the specific legal requirement and willfully violated it. This heightened standard of intent departs from previous interpretations based on Congress’s 2001 amendment of Section 1960 to punish unlicensed money transmission “whether or not the defendant knew that the operation was required to be licensed or that the operation was so punishable.”
Galeotti stated that DOJ may continue to pursue certain cases under Section 1960(b)(1)(C), which prohibits the transmission of funds that the defendant knows are derived from a criminal offense, or are intended to be used to support unlawful activity. However, Galeotti clarified that DOJ would not bring even a (b)(1)(C) charge against a developer of “software [that] is truly decentralized and solely automates peer-to-peer transactions, and where a third party does not have custody and control over user assets.”1
DOJ’s position is consistent with its view that “merely writing code, without ill-intent, is not a crime. Innovating new ways for the economy to store and transmit value and create wealth, without ill-intent, is not a crime.” That said, Galeotti’s comments allowed for circumstances in which “ill-intent” might be present, in which case charges under a statute other than Section 1960 may be appropriate.
DOJ’s focus on specific criminal intent aims to signal a commitment to encouraging innovation in the digital asset space while maintaining standards for legal accountability and ensuring market stability.As such, DOJ would continue to pursue cases involving embezzlement and misappropriation of customers’ funds on exchanges, digital asset investment scams, hacking, and smart contract vulnerability exploitation.
This approach aligns with broader efforts under the Trump administration to create a more innovation-friendly regulatory environment, as seen in recent agency and legislative initiatives. (For more information, see our blog posts SEC and CFTC Launch Crypto Initiatives to Revamp Regulations and Promote Innovation and The GENIUS Act of 2025: Stablecoin Legislation Adopted in the US.)
Implications for Recent Criminal Enforcement Actions
Galeotti’s speech may provide some comfort to developers of decentralized platforms, who have long feared prosecution for unintended criminal use of their code by others. Yet it is not a complete resolution to some of the sector’s ongoing criminal cases and regulatory challenges. For instance, the newly announced enforcement policy does not foreclose all liability for developers that knew criminal activities may be afoot on their decentralized platform, even if they have no personal involvement. Nor does it provide guidance to such developers as to what DOJ considers to be a “truly decentralized” platform.
Notably, the speech comes in the wake of the high-profile conviction of Roman Storm, co-founder of crypto mixer Tornado Cash, who was found guilty in the Southern District of New York on August 6, 2025, of conspiring to operate an unlicensed money transmitting business under 18 U.S.C. § 1960(b)(1)(C) (although the jury deadlocked on more serious charges of money laundering and sanctions violations). Foreshadowing DOJ’s policy shift, in May 2025, the DOJ trial team informed the judge overseeing the Storm case that it would not proceed to trial on the (b)(1)(B) charge and would limit its Section 1960 charge to (b)(1)(C).
In another related development announced on the same day, the founders of Samourai Wallet, another crypto mixer, “pled guilty to participating in a conspiracy to operate a money transmitting business that transmitted crime proceeds from, among other things, illegal dark web markets, cyber intrusions, a spear phishing scheme, and schemes to defraud multiple decentralized finance protocols.” Conspiracy, as Galeotti noted in his speech, is itself a form of charge that requires specific intent.
Galeotti’s speech suggests a more nuanced approach by DOJ going forward for criminal prosecution under 18 U.S.C. § 1960, emphasizing that charges will not be pursued against the developer if the software is genuinely decentralized and automates peer-to-peer transactions without control over user assets. By contrast, the convictions against the Tornado Cash or Samourai Wallet founders both involved knowing participation in criminal conduct. In the Tornado Cash case, although the defense maintains that Storm’s role was limited to writing code for a decentralized platform, DOJ’s indictment called into question the decentralized nature of Tornado Cash, and DOJ’s press release upon conviction stated that Storm provided the Tornado Cash service “with knowledge that Tornado Cash was transmitting large volumes of criminal proceeds” and “was personally aware of numerous instances in which criminals transmitted proceeds of criminal exploits using Tornado Cash.” Similarly, in the case of the Samourai Wallet founders, DOJ’s press release stated that the co-founders knowingly enabled criminal activity on their platform and “did not just facilitate [the] illicit movement of money, but also encouraged it.”
In light of the Tornado Cash and Samourai Wallet cases, it remains to be seen how DOJ will assess a decentralized platform developer’s lack of custody and control over user assets, or a developer’s knowledge or lack thereof that a platform may have been used for criminal activity.
Conclusion
DOJ’s revised stance on liability for developers of decentralized technologies may represent a positive step toward fostering innovation and providing clarity while maintaining legal accountability in the digital asset sector. By focusing on specific criminal intent, rather than the development of code underlying decentralized protocols, DOJ’s revised approach arguably creates a more supportive environment for the digital asset industry. This approach aims to alleviate the fears of developers who have been concerned about potential legal repercussions, while encouraging responsible development within the blockchain ecosystem.
Yet while DOJ’s announcement provides a degree of reassurance, it does not fully resolve the ongoing regulatory challenges faced by the digital asset sector. The broader legal landscape remains complex, with agency efforts under way to address the nuances of blockchain-based decentralized technologies. Comprehensive digital asset structure legislation, such as the CLARITY Act, may provide crucial direction for the agencies, as well as legal clarity for developers and market participants.
