DOJ Shifts Stance on Decentralized Software Developers’ Liability

The U.S. Department of Justice announced a major shift, ceasing prosecution against decentralized software developers under Section 1960(b)(1)(C) to encourage innovation and protect creators.

This significant policy change addresses concerns like those raised by the Roman Storm case, potentially boosting developer and investor confidence in decentralized finance markets.

DOJ Exemption Spurs Innovation and Market Confidence

The U.S. Department of Justice has implemented a new policy exempting decentralized software developers from prosecution under certain conditions. This change, announced by Acting Assistant Attorney General Matthew Galeotti, underscores the DOJ’s commitment to fostering innovation by not criminalizing code creation in the absence of malicious intent.

The announcement clarified that as long as the systems are fully decentralized, automated, peer-to-peer, and without third-party control over assets, developers have clarity about their operations. The DOJ emphasizes that contributions to open-source projects without criminal intent will not constitute a crime, aiming to encourage more development in the digital asset space.

“Our view is that merely writing code without ill intent is not a crime. Innovating new ways for the economy to store and transmit value and create wealth without ill intent is not a crime.” – Matthew Galeotti, Acting Assistant Attorney General, U.S. Department of Justice

Following this announcement, developers and investors have expressed support, recognizing it as a step towards better understanding and cooperation with regulators. Statements from industry leaders and online communities praise this approach, highlighting the importance of a balanced legal framework that supports technological advancement while maintaining lawful practices.

Ethereum and DeFi Markets Positioned for Growth

Did you know? The DOJ’s decision aligns with the historical community push following the Tornado Cash prosecution, emphasizing the need for clearer boundaries between development and liability.

Ethereum (ETH) stands as a central player in this shift, with a current price of $4,298.83 and a market cap of $518.90 billion as of August 22, 2025. ETH’s 24-hour trading volume reached $32.93 billion, reflecting a 32.42% decrease, as per CoinMarketCap. With a circulating supply of 120.71 million ETH, the market reacts attentively to regulatory updates.

Coincu’s research suggests the DOJ’s announcement may catalyze a surge in decentralized projects, especially within the DeFi sector. Historical data supports optimism in markets when regulatory clarity is provided, indicating potential upward trends for key assets central to decentralized protocols.