The head of the Criminal Division of the U.S. Department of Justice stated that Open Source smart contracts developers do not need to bear unintentional criminal liability.

Matthew Galeotti, the Director of the Criminal Division of the U.S. Department of Justice, spoke at the U.S. Innovation Project Summit on August 21, clearly stating that open source smart contracts developers do not have to bear non-intentional criminal liability when there is no criminal intent. This statement provides clearer legal guidance for crypto assets developers and smart contracts creators, addressing long-standing industry concerns about developers' criminal liability.

Open source code contributions do not constitute a crime.

Galeotti emphasized that simply contributing code to open source projects, without malicious or criminal intent, does not constitute a crime. He pointed out: "Writing code without malice does not constitute a crime. New ways to store and transfer value in the innovative economy, and to create wealth, do not constitute a crime as long as there is no malice involved." This position is the clearest guidance from the Department of Justice to date regarding the responsibilities of developers in the digital asset ecosystem.

He further explained that allegations of aiding and abetting illegal activities or participating in criminal conspiracy require prosecutors to prove that developers had a clear intent to commit a crime. This establishes a higher standard of evidence for developers' cases, ensuring that developers will be held accountable only in limited circumstances where the code has been misused. Galeotti stated that the Department of Justice acknowledges that these issues involve "complex legal and factual" matters that require careful consideration on a case-by-case basis.

Unauthorized fund transfer protection

In response to industry concerns that smart contracts developers may face criminal charges for operating "unlicensed remittance businesses," the Department of Justice has clarified protective measures. According to Title 18, Section 1960 of the U.S. Code (18 USC 1960), the Department of Justice will not initiate lawsuits for regulatory violations if there is no evidence showing that the developers knowingly violated the law and did so intentionally.

Galeoti specifically provides protection for truly decentralized software. He pointed out that if the software can only automatically execute peer-to-peer transactions and third parties do not have custody or control over user assets, then no charges will be brought against third parties based on 1960(b)(1)(C). This guideline is consistent with the position of regulatory agencies that non-custodial crypto software does not constitute unauthorized funds transfer business.

Technical neutrality and the protection of legal innovation

Galeotti reiterated the Department of Justice's principle of technological neutrality, emphasizing that tools developed legally should not hold developers liable for misuse by third parties. He stated that prosecutors should focus on the wrongdoers who actually misuse the tools, rather than the good-faith creators. The Department of Justice treats crimes related to digital assets equally with traditional financial violations, while also striving to protect legitimate innovation from excessive regulation.

Industry significance

The statement from the Department of Justice directly responded to the concerns of defense attorneys and the Crypto Assets industry regarding the criminal liability of smart contracts developers, providing greater legal certainty for Open Source developers. By distinguishing between legal development and criminal behavior, the Department of Justice has created a more favorable environment for innovation in decentralized finance (DeFi) and blockchain technology. This guideline not only clarifies the boundaries of developer responsibility but also provides important legal protection for the future development of the digital assets industry.

In short, the latest stance of the U.S. Department of Justice indicates that as long as developers have no criminal intent, the code they contribute to open source projects or the decentralized tools they develop will be protected. This policy is expected to promote continuous innovation in the Crypto Assets industry within a legal compliance framework, while maintaining the principle of technological neutrality.