- DOJ changes prosecution policy for DeFi developers requiring intent.
- Boost in Ethereum sector confidence.
- Positive effects on DeFi funding and institutional inflows.
The U.S. Department of Justice has stopped prosecuting DeFi developers without clear criminal intent, as announced by Acting Assistant Attorney General Matthew R. Galeotti.
This policy change reassures the Ethereum community, evident in increased DeFi funding and rising Ethereum institutional inflows, signaling a shift towards clearer regulatory intent.
The US Department of Justice (DOJ) announced the end of its blanket prosecution approach against decentralized finance (DeFi) developers. This will now require proof of criminal intent, impacting confidence in Ethereum and related protocols significantly.
Matthew R. Galeotti, Acting Assistant Attorney General, clarified that the DOJ policy shift aims to avoid criminal charges for simple contribution to open-source projects unless there’s intent to commit illegal activities. He stated, “The mere publication or contribution to open source projects does not constitute a crime if there is no specific intent to facilitate illegal activities.” This affects the regulatory landscape significantly.
Immediate effects include a notable increase in developer activity and confidence within the Ethereum ecosystem. Institutional investments have also surged, particularly benefiting compliance-driven protocols and governance tokens like ETH, LINK, GNO, and AAVE.
Financial implications include a $6.7 billion increase in DeFi venture capital funding noted for Q2 2025, attributed to the new guidelines. Ethereum-based ETFs saw substantial inflows, highlighting regained investor confidence in compliant decentralized financial infrastructures.
The DOJ shift represents a policy realignment supporting innovation while maintaining compliance with existing laws. Developers and stakeholders believe this pivot will encourage more open-source project contributions without fear of unjust prosecution.
Through 2031, the Total Value Locked (TVL) in DeFi is projected to achieve a 49% Compound Annual Growth Rate (CAGR). This anticipates a surge in participation in Ethereum and layer-2 assets, driven by advancements in real-world asset tokenization.
