US Revises Stance on DeFi Following Tornado Cash Case

The US Department of Justice will stop prosecuting DeFi app developers under the unlicensed money transmission statute.

The US Department of Justice will cease prosecuting developers of DeFi applications under the statute concerning the operation of unlicensed money transmission businesses. This was announced by Matthew Galeotti, the acting head of the department’s criminal division.

The announcement came weeks after Roman Storm, co-founder of the Tornado Cash mixer, was convicted on the same charge. He faces up to five years in prison.

Galeotti clarified the details of the new policy: charges will not be filed if the software is genuinely decentralized, automates P2P transactions, and does not allow developers access to user funds.

He noted that other charges may apply if criminal intent is present.

Jake Chervinsky, chief legal officer at Variant Fund, believes that based on these statements, Storm’s case should be dismissed.

The head of DOJ’s Criminal Division says there will be no Section 1960(b)(1)(C) charges against developers who lack custody and control over user assets.

Roman Storm was just convicted on this exact charge under this exact circumstance. Justice for Roman means dropping the case. https://t.co/jynS7vkENu

— Jake Chervinsky (@jchervinsky) August 21, 2025

“Justice for Roman means dropping the case,” he wrote.

However, a Justice Department representative emphasized that the new policy is not retroactive. This means it will not affect Storm’s sentence.

Community Reactions

Amanda Tuminelli, executive director of the DeFi Education Fund, thanked the department for “hearing concerns regarding Section 1960.”

However, not everyone shared the optimism. Peter Van Valkenburgh, head of Coin Center, called the statement “a little late” for Storm’s case.

“The department should not leave innovators guessing about what triggers criminal liability.”

I’m grateful for that but concerned that it’s a little late for that approach in Roman Storm’s case, and we’re not ready to celebrate when he is still facing an appeal. 2/

— Peter Van Valkenburgh (@valkenburgh) August 21, 2025

He questioned how the Justice Department would act during the developer’s appeal.

Van Valkenburgh also expressed concern about the “criminal intent” caveat and noted that the official’s words do not carry binding legal force.

Back in July, Tornado Cash developer’s lawyers announced their intention to file a motion to dismiss the trial.