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Today, Acting Assistant Attorney General (AAAG) of the Criminal Division of the Department of Justice (DoJ), Matthew Galeotti, dealt with guests at an occasion arranged by the American Innovation Project. His remarks restated the DoJ’s position that it will no longer prosecute open-source cryptocurrency designers doing not have criminal intent.

During his discussion, AAAG Galeotti communicated that Deputy Attorney General (DAG) Todd Blanche requested him to go over the DoJ’s dedication to fair police in the digital property sector.

AAAG Galeotti referenced a memorandum released by DAG Blanche in April, revealing an end to the guideline by enforcement method—which had actually been highlighted by the Biden administration—worrying the cryptocurrency market and its designers.

In his address, he enhanced numerous bottom lines from the Blanche memorandum, that included notable declarations:

“The Department will not utilize federal criminal statutes to create a new regulatory framework over the digital asset industry. The Department will not employ indictments as tools for lawmaking. We aim to clarify for innovators what actions could lead to potential criminal prosecution.”

“Our position is clear: simply writing code with benign intentions is not a crime. Creating innovative methods for value storage and transmission, without malicious intent, is not criminal.”

“Generally, developers of neutral tools, lacking criminal intent, should not be held accountable for the misuse of those tools by third parties. Criminal liability should rest with the individual who misuses such tools to breach the law.”

Responses from prominent figures in the cryptocurrency sector highlighted the optimism produced by a few of Galeotti’s declarations:

Conversely, some market leaders revealed bookings, pointing out aspects of Galeotti’s speech that raised issues:

<pUpon reflection, the author recommends that while Galeotti’s remarks might influence some optimism, they however necessitate a tempered and hesitant analysis, comparable to that revealed by Van Valkenburgh. The declarations made might show a capacity for ongoing prosecutorial overreach by the DoJ.

The author presumes that designers like those behind Samourai and Tornado Cash may stay exposed to prosecution, regardless of the guarantees provided by Galeotti, especially provided a few of the more uncomfortable remarks made throughout his address. Key amongst these are the following excerpts:

“If a developer merely contributes code to an open-source project without the specific intent to assist criminal conduct, aid or abet a particular crime, or join a criminal conspiracy, he or she is not criminally liable.”

“As the DAG memo clarifies, the Justice Department will not charge regulatory violations in cases involving digital assets, such as unlicensed money transmission under 1960(b)(1)(A) or (B), unless there is evidence that a defendant was aware of the specific legal requirements and intentionally violated them. [However] we may, under certain circumstances, bring cases under 1960(b)(1)(C), which prohibits the transmission of funds that the defendant knows are derived from a criminal offense or intended to support unlawful activities.”

“Where the evidence indicates that software is genuinely decentralized and merely facilitates peer-to-peer transactions, and where a third party lacks custody and control over user assets, new 1960(b)(1)(C) charges will not be approved. Nevertheless, if criminal intent is demonstrated, other charges may be pursued — all of the conduct and services they provide will be assessed comprehensively.”

Having evaluated both the Samourai Wallet and Tornado Cash cases, the author keeps in mind that the proof showing criminal intent for the designers in those cases frequently came from their responses to abuse of their software application, which sometimes appeared provocatively revealed.

Illustratively, the Samourai designers especially welcomed Russian oligarchs to use their service for averting sanctions:

It is vital for cryptocurrency designers to acknowledge that conversations recommending or joking about dubious usages of their services can result in misconceptions concerning their intent.

Although joking is not prohibited, it pertains to keep in mind that Roman Storm of Tornado Cash made considerable efforts to alleviate the abuse of his platform by carrying out preventive procedures, such as a Chainalysis oracle.

However, the author’s crucial issue stays: AAAG Galeotti’s comments concerning criminal intent might be interpreted in a broad way, eclipsing numerous helpful assertions he made about the DoJ’s concentrate on not prosecuting well-intentioned designers.

Consequently, the author lines up with Van Valkenburgh’s viewpoint, stressing the need for ongoing advocacy in Congress for safe harbor arrangements as laid out in the Blockchain Regulatory Certainty Act (BRCA) and their incorporation into the current draft of the clearness Act, while also pursuing important judicial fights.

Ultimately, regardless of Galeotti’s relatively positive discourse, the legal landscape for designers stays precarious.



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