Crypto: Doj clarifies, no prosecution for blockchain developers

A senior official of the United States Ministry of Justice (DOJ) aroused new regulatory debates on cryptocurrency after declaring that the department will not continue the blockchain software developers who do not feed criminal intentions. As expected, this declaration sparked mixed reactions in different corners of the cryptosphere.

The doj limits the use of 1960 (b) (1) (c) against blockchain developers

Matthew Galeotti, acting chief of the Criminal Division of Doj, made these declarations during an intervention with pro-Crypto groups and leaders in the sector during an event organized by the American Innovation Project. At the Thursday political summit held in Jackson Hole, Wyoming, Galeotti explained that the charges under 1960 (b) (1) (c) would no longer be used against blockchain developers.

According to the American code 1960 (b) (1) (c), unauthorized money transfer companies are prohibited from transactions related to crime or illicit activities. The violation of this code can lead to a sentence of up to five years in federal prison.

The department will not use federal criminal laws to develop a new regulatory regime on the digital asset industry. The department will not use charges as a legislation tool. The department should not let innovators guess what could lead to criminal prosecution.

Galeotti

In an interesting reversal, a Manhattan court recently declared the developer of Tornado Cash, novel Storm, guilty of illegal exploitation of a money transmission company, which violates the 1960 (b) (1) (c).

New policy clarified as part of the Tornado Cash affair

Galeotti said that the 1960 inculpations (b) (1) (c) will not be applied under the following conditions:

• Blockchain software is truly decentralized (no central operator or controlling part).
• In addition, it only automates peer-to-peer transactions (users interact directly with each other).
• No third party holds or control or control of user assets.

However, DoJ staff noted that “other accusations could be appropriate” if a malicious intention is detected in such cases.

Galeotti mentioned that the new policy will come into force immediately, while approaching Storm's recent conviction for the same accusation. In 2021, the developer of Tornado Cash was arrested and charged for several chiefs, including conspiracy of money laundering and violation of sanctions.

Mainly, these alleged activities were linked to its role at Tornado Cash, an open-source blockchain mixer which allows users of Crypto to carry out private transactions on the channel.

After taking office earlier this year, the Trump administration continued the Storm file. Some charges were abandoned against him, in agreement with a Doj memo published in April Asking federal prosecutors to withdraw most of the crypto charges.

However, the state has always continued allegations surrounding Storm knowledge of Tornado Cash users who have carried out illegal transactions linked to criminal activities.

Crypto leaders greet the change of policy but express concerns about the calendar and the Storm case

The blockchain lobbyists and the sector leaders present at the Wyoming conference praised Galeotti's words, although some have expressed reservations about the political revision calendar. Amanda Tuminelli, executive director of the DEDUCE FUND, expressed her satisfaction with the change of policy and recognized the role of Trump in taking into account concerns around the “1960 section”.

However, although Peter Van Valkenburg, Executive Director of Coin Center, praised Galeotti's statements, he considered that politics arrived “a little late”, particularly referring to the Storm case. Despite Trump's pro-Crypto policies, decentralized finance and confidentiality maximalists have raised concerns about the pursuit and conviction of Storm by the Doj.