In a move that could reshape crypto regulation, the DOJ policy change announced in 2025 marks a pivotal shift for decentralized software developers. Roman Storm, co-founder of Tornado Cash, stands at the center of this turning point—just as he faces up to five years in prison for operating what prosecutors called an unlicensed money transmitting business. The Department of Justice’s recent announcement, however, reveals prosecutors will no longer charge developers of truly decentralized software under these specific money transmission laws. Community leaders, legal experts, and crypto investors are closely following developments, as the outcome shapes the future of blockchain innovation and responsible regulation.
Decoding the DOJ policy change for crypto
This landmark DOJ policy change stems from mounting pressure within crypto circles to clarify who should bear legal responsibility when decentralized software is misused. U.S. code 1960(b)(1)(C), the law at the heart of Roman Storm’s conviction, was designed to target unlicensed money transmission involving criminal proceeds. Now, the DOJ has announced that prosecutions under this statute will only move forward if there is clear evidence that a developer or operator has actual custody or control over user funds—and criminal intent. For non-custodial decentralized software like Tornado Cash, such charges will no longer apply, signaling a significant shift in how crypto regulation is enforced.
Roman Storm and the impact of decentralized software
Roman Storm’s case highlights a disconnect between prior law enforcement approaches and evolving blockchain technology. Tornado Cash, the decentralized coin-mixing tool he helped build, allowed users to obscure their financial transactions, leading to concerns about money laundering risks. But Tornado Cash never held user assets; it operated as a non-custodial protocol. Industry advocates argue that applying money transmission laws to such software is both ineffective and unfair, as it penalizes innovation without addressing intent. The new DOJ policy change aims to close this gap by focusing on criminal conduct, not just software design.
Lessons for developers after DOJ’s announcement
For decentralized software developers, the DOJ policy change brings a more nuanced and predictable regulatory landscape. Going forward, crypto projects that are fully decentralized, non-custodial, and automated should not fear prosecution under money transmission laws alone. Instead, the department will evaluate cases based on demonstrable intent and control over user assets. This distinction encourages continued experimentation while also holding malicious actors accountable. Developers can draw on Tornado Cash and Roman Storm’s high-profile case as a guideline for compliance—transparency and decentralization now offer greater legal protection.
Crypto regulation in light of money transmission laws
The crypto industry has long debated whether money transmission laws can be fairly applied to decentralized networks. The DOJ’s policy change recognizes that peer-to-peer protocols powered by smart contracts present fundamentally different risks than centralized platforms. By focusing on evidence of control and intent, regulators aim to avoid stifling innovation while still targeting egregious misconduct. Organizations like the DeFi Education Fund and Coin Center cheered the move, saying it supports a balanced framework for crypto regulation and sends an important signal to lawmakers worldwide.
Ripple effects: What’s next for the crypto ecosystem?
While the DOJ policy change does not erase Roman Storm’s conviction, it forecasts major changes for both developers and regulators. Legal experts suggest that similar cases, from Tornado Cash to future decentralized platforms, will be assessed under stricter standards emphasizing custody and intent, not just code. The crypto community hopes this will lead to smarter, more equitable enforcement and a global reputation for the United States as a leader in digital innovation. With money transmission laws reinterpreted for the age of decentralized software, blockchain builders may once again focus on advancing the technology—rather than fighting costly legal battles.
Frequently asked questions about the DOJ policy change (FAQ)
Why did the DOJ change its approach to decentralized software developers?
The DOJ policy change reflects the recognition that truly decentralized, non-custodial software operates differently than traditional money transmitters. Prosecutors will now focus on cases involving custody, control, and intent, aligning with industry concerns about fair and effective crypto regulation.
Does the DOJ policy change affect Roman Storm’s conviction?
No. Although Roman Storm was convicted under the old interpretation of the law, the new DOJ policy does not retroactively overturn his case. However, it sets a precedent for future prosecutions involving decentralized software.
What counts as decentralized software under the new policy?
Decentralized software is considered non-custodial and automated, with no single party controlling user assets. Developers of such software are less likely to face money transmission charges unless evidence of criminal intent or control exists.
How does this relate to money transmission laws?
Money transmission laws target businesses moving funds on behalf of others. The DOJ policy change clarifies that decentralized, non-custodial protocols like Tornado Cash do not meet this threshold, shifting regulatory attention toward centralized services.
What should developers do to remain compliant after the DOJ policy change?
Developers should ensure their crypto projects are truly decentralized and non-custodial, document their protocol structures, and maintain transparency to avoid potential legal risks.
Sources to this article
- CoinDesk. (2025). “Tornado Cash’s Roman Storm Faces 5 Years for a Crime DOJ Now Says It Won’t Prosecute.”
- U.S. Department of Justice. (2025). Policy updates regarding decentralized software and crypto money transmission laws.
- DeFi Education Fund. (2025). Industry commentary on DOJ prosecution standards.
- Coin Center. (2025). Legal analysis on software liability and crypto regulation.
