A Shift in DOJ Policy: Decentralized Software Developers Spared from Prosecution
A top Department of Justice official announced a significant change in policy towards decentralized software developers during a gathering of crypto industry leaders. The U.S. government will no longer pursue charges under U.S. code 1960(b)(1)(C) against developers of decentralized software, a crime for which Tornado Cash co-founder Roman Storm was recently convicted.
The Controversial Charge
U.S. code 1960(b)(1)(C) prohibits operators of unlicensed money transmitting businesses from dealing in funds derived from or intended to support unlawful activity. Storm was found guilty of violating this law, leading to speculation about the future of similar cases.
New DOJ Stance
Acting head of the DOJ’s criminal division, Matthew Galeotti, revealed that federal prosecutors will no longer pursue 1960(b)(1)(C) charges against developers of truly decentralized software. The new policy exempts developers of software that solely automates peer-to-peer transactions without third-party custody and control over user assets.
If criminal intent is present, alternative charges may still be applicable, emphasizing the importance of intent in determining legal consequences.
Industry Reaction
Crypto lobbyists and industry leaders welcomed Galeotti’s announcement, applauding the shift in DOJ policy. Amanda Tuminelli of the DeFi Education Fund commended the department for addressing concerns about Section 1960 and recognizing the responsibility of developers.
Peter Van Valkenburg of Coin Center expressed gratitude for the policy change but questioned its timing in light of Storm’s recent conviction. Concerns were raised about the implications of the DOJ’s stance on criminal intent and the non-binding nature of official statements.
Looking Ahead
The shift in DOJ policy marks a significant development for the crypto industry, signaling a more nuanced approach to prosecuting developers of decentralized software. While the announcement was met with enthusiasm, questions remain about its impact on ongoing cases and future legal proceedings.