tl;dr
The Justice Department’s Criminal Division head, Matthew Galeotti, clarified that writing code without criminal intent is not a crime, offering clarity for crypto developers and smart contract creators. He emphasized that innovating new economic methods without ill intent is outside criminal behavio...
The Justice Department’s Criminal Division head Matthew Galeotti clarified that writing code without criminal intent is not a crime, offering much-needed clarity for crypto developers and smart contract creators regarding criminal liability. Speaking at the American Innovation Project Summit on August 21, Galeotti emphasized that innovating new economic methods for storing and transmitting value without ill intent falls outside the scope of criminal behavior. This marks the DOJ’s most definitive stance yet on the responsibility held by developers in the digital asset space.
Addressing concerns about smart contract developers potentially being held liable for unlicensed money transmitting businesses, Galeotti noted that contributing code to open source projects without specific criminal intent does not constitute aiding and abetting a crime. Prosecutors must prove clear intent to charge developers with aiding, abetting, or conspiracy, raising the evidentiary bar significantly. This targeted response aimed to alleviate fears within the industry about prosecuting developers uninvolved in peer-to-peer transaction operations.
Regarding unlicensed money transmission laws under 18 USC 1960, the DOJ will refrain from prosecuting regulatory violations unless there is evidence that defendants knowingly and willfully disregarded legal requirements. Galeotti extended special protections for truly decentralized software that facilitates peer-to-peer transactions without any third-party custody or control over user assets. In such cases, charges against third parties under new provisions will not be pursued, affirming the non-custodial nature of many crypto tools as recognized by regulatory guidance.
Galeotti further distinguished between legitimate software development and criminal misconduct, asserting that developers of neutral tools without criminal intent should not be held accountable for misuse by third parties. The DOJ plans to focus enforcement efforts on parties who misuse technology rather than on creators acting lawfully. This technology-neutral approach treats digital asset crimes in line with traditional financial crimes, aiming to protect innovation from unnecessary regulatory clampdowns while maintaining law enforcement rigor.