US DOJ Refrains from Prosecuting Decentralized Software Developers

The U.S. Department of Justice, headed by Matthew R. Galeotti, announced in Wyoming it will refrain from prosecuting developers of decentralized, non-custodial software under Section 1960(b)(1)(C).

This shift could spur increased DeFi investment while affecting Ethereum-linked assets, as developers benefit from reduced compliance risks unless criminal intent is determined.

DOJ’s New Policy and Its Implications for Decentralized Projects

Matthew Galeotti, Acting Assistant Attorney General, detailed the policy during a summit in Wyoming. Developers of truly decentralized software will not face prosecution under Section 1960(b)(1)(C), though other charges remain possible if criminal intent is evident. “Developers of truly decentralized and non-custodial software will not be prosecuted under Section 1960(b)(1)(C), though criminal intent could still result in other charges,” said Matthew R. Galeotti. Roman Storm of Tornado Cash was previously convicted under the repealed section and may face up to five years in prison. The DOJ’s stance implies a potentially less risky environment for developers focused on maintaining privacy and autonomous logic.

Institutional investors may show renewed interest in decentralized platforms, potentially boosting investment and liquidity in privacy-centered projects. Ethereum remains notably influenced, given its association with mixer services like Tornado Cash. Anticipated investment growth might stabilize their ecosystems further. Crypto markets showed limited immediate reaction to Galeotti’s announcement, mainly due to ongoing monitoring by stakeholders.

The Coincu Research Team suggests the DOJ’s refined policy could prompt financial sectors to reconsider regulations related to DeFi and privacy-enhancing technologies. Strategies might evolve to balance innovation and oversight optimally.

Market Dynamics Amid Ethereum’s Price and DOJ Policy Shifts

Did you know? In 2025, the DOJ’s adjusted approach mirrored a similar incident in 2022 when Tornado Cash faced scrutiny, sparking discussions on privacy coin regulations and market stability.

According to CoinMarketCap, Ethereum (ETH) currently stands at $4,238.80, with a market cap of $511.65 billion and 13.39% market dominance. Recent 24-hour trading volume experienced a 29.89% decrease. Price logged a 1.74% dip over the last 24 hours and 7.60% for the week, despite a notable 89.64% rally over 60 days.

The Coincu Research Team suggests the DOJ’s refined policy could prompt financial sectors to reconsider regulations related to DeFi and privacy-enhancing technologies. Strategies might evolve to balance innovation and oversight optimally.