Justice Department (DOJ) Criminal Division head Matthew Galeotti declared that writing code without criminal intent does not constitute a crime, providing crypto developers and smart contract creators with clearer boundaries on criminal liability.
During remarks at the American Innovation Project Summit on Aug. 21, Galeotti stated:
“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.”
The comments represent the Justice Department’s most explicit guidance yet on developer responsibility in the digital asset ecosystem.
Developer liability limits
The Criminal Division addressed industry concerns about holding smart contract developers criminally liable for operating unlicensed money transmitting businesses.
Galeotti stressed that developers contributing code to open source projects without specific criminal intent face no liability for aiding and abetting violations.
He explained:
“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.”
Both aiding and abetting charges and conspiracy prosecutions require prosecutors to prove specific intent, establishing a higher evidentiary standard for developer cases.
The guidance directly responds to defense counsel presentations raising concerns about criminal liability for smart contract developers and code publishers not otherwise involved in peer-to-peer transactions.
The Criminal Division acknowledged these as “complex questions of law and fact” requiring rigorous case-by-case evaluation.
Unlicensed money transmission protections
For unlicensed money transmission charges under 18 USC 1960, the department will not prosecute regulatory violations absent evidence that defendants knew specific legal requirements and willfully violated them.
Galeotti provided specific protections for truly decentralized software that automates peer-to-peer transactions without third-party custody or control over user assets, stating:
“Where the evidence shows that 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, new 1960(b)(1)(C) charges against a third party will not be approved.”
The guidance considers regulatory guidance suggesting that non-custodial crypto software does not constitute unlicensed money transmission.
Further, Galeotti established clear principles distinguishing between legitimate development and criminal conduct.
Developers of neutral tools with no criminal intent should not be held responsible for third-party misuse of their creations. When third parties violate criminal law using developer tools, prosecutors should target the misusing party rather than well-intentioned creators.
The DOJ official described the department’s technology-neutral approach, which treats digital asset crimes identically to traditional financial violations while protecting lawful innovation from regulatory overreach.
The post DOJ Criminal Division chief says open source smart contract devs not criminally liable without intent appeared first on CryptoSlate.
