DeFi Scores Major Win: DOJ Softens Stance on Money Transmitting Charges

The U.S. Department of Justice (DOJ) Acting Assistant Attorney General, Matthew Galeotti, has provided a major boost for the DeFi industry and developers, especially. This came following his remarks at the American Innovation Project (AIP).

DeFi In Focus As DOJ Says Writing Code Alone Isn’t A Crime

In his official remarks at the AIP, Galeotti said that their view is that merely writing code without ill intent is not a crime. He further remarked that innovating new ways for the economy to store and transmit value and create wealth, without ill intent, is not a crime.

Coinbase’s Chief Legal Officer (CLO), Paul Grewal, also picked up on these remarks and noted that Galeotti had said that, without specific intent, contributing code alone will not subject any developer to liability under 18 USC 1960b1c. This is the provision of the law that prohibits unlicensed money transmitting businesses.

Just now in Jackson Hole: under the Blanche Memo, “merely writing code without ill intent is not a crime.” Without specific intent, contributing code alone will not subject any developer to liability under 18 USC 1960b1c. https://t.co/joA4I1eoRr

— paulgrewal.eth (@iampaulgrewal) August 21, 2025

This shines the spotlight on DeFi, considering that the DOJ had charged Roman Storm for running an unlicensed money transmitting business. As CoinGape reported, the jury recently found the Tornado Cash co-founder guilty of the 1960 charge.

As Grewal also mentioned, Galeotti had further stated they will not approve new charges against a third-party under 18 USC 1960b1c where the software “is truly decentralized and solely automates peer-to-peer transactions, and where a third-party does not have custody and control over user assets.”

Following Matthew Galeotti’s remarks, legal expert and DeFi advocate Jake Chervinsky said,

The head of DOJ’s Criminal Division says there will be no Section 1960(b)(1)(C) charges against developers who lack custody and control over user assets.Roman Storm was just convicted on this exact charge under this exact circumstance. Justice for Roman means dropping the case.

Uncertainty Over Liability For Crypto Developers Ends Today

In an X post, Paradigm’s Chief Legal Officer Katie Biber noted that for too long, crypto and open source developers in the U.S. have been living under a cloud of doubt. However, she declared that that uncertainty ends today, with the “emphatic statement from the DOJ that shipping code is not a crime.”

She went on to highlight major points from Galeotti’s remarks on how a developer won’t be liable in situations in which they create the code without ill intent. She also noted how the DOJ AAG stated that developers of neutral tools should be responsible for someone else’s misuse of these tools.

Biber stated that these remarks build on the Blanche Memo from April earlier this year. The memo made it clear back then that the DOJ is not a crypto regulator and that the era of regulation by prosecution is over, the Paradigm CLO claimed.

Notably, this development comes at a time when the U.S. is looking for ways to combat illicit finance that involves digital assets. The U.S. Treasury recently issued a request for comments from the public on how to go about this, following the passage of the GENIUS Act.