The United States Justice Department does not plan to target software developers who create decentralized cryptocurrency platforms for transmitting cryptocurrencies without ill intent, according to prepared remarks by acting assistant attorney general Matthew Galeotti.

Galeotti said at a cryptocurrency summit in Wyoming that merely writing code, without ill intent, is not a crime.

The department will move away from bringing charges over failure to register as a money transmitter business.

Current rules require money transmitters like Western Union and Venmo to be licensed, vet customers, and report suspicious activity to prevent money laundering.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Years of regulatory fragmentation created developer uncertainty

The DOJ’s policy shift addresses a fundamental problem created by the U.S.’s patchwork approach to cryptocurrency regulation.

Since at least 2018, different federal agencies have classified cryptocurrencies in contradictory ways: FinCEN treats them as money, the IRS as property, the CFTC as commodities, and the SEC as securities, creating a “complex regulatory environment” for businesses trying to comply2.

This fragmentation meant developers faced uncertainty about which rules applied to their work, with the added risk of criminal prosecution for money transmission violations.

The New York Fed noted in 2019 that there was “no overarching regulatory framework for private digital currencies,” indicating the government’s reactive rather than proactive approach to the space3.

The recent Tornado Cash case exemplified this problem, where co-founder Roman Storm was convicted for operating an unlicensed money transmitting business despite arguments that he “merely created the computer code”1.

2️⃣ DOJ abandons “regulation by prosecution” strategy

The Justice Department’s announcement represents a retreat from using criminal cases to set regulatory precedent in an area lacking clear legislative guidance.

Acting Assistant Attorney General Matthew Galeotti explicitly stated the DOJ will focus on “intent-driven criminal activity, moving away from using indictments as a lawmaking tool”4.

This shift acknowledges that previous prosecutions like the Tornado Cash case “raised questions about accountability for software developers” who were “held accountable for third-party misuse of their software”5.