[Analysis] The US DOJ's Great Pivot: Declaring 'Code is Not a Crime' and a New Era of Protection for Crypto Developers

On April 28, 2026, Acting US Attorney General Todd Blanche officially declared the end of the "regulation by prosecution" era that had targeted the cryptocurrency industry. He established a clear stance that "code is not a crime," setting a new legal standard that excludes developers who create open-source tools or decentralized protocols from investigations, unless there is evidence of intentional participation in criminal activity.

This announcement is a decision that overturns the existing practice where developers were held legally responsible simply for providing technical means. Acting AG Blanche made it clear that the Department of Justice (DOJ) will no longer serve as a de facto regulator of digital assets, showing a commitment to revising indiscriminate prosecution strategies that hinder technological innovation.

Today's declaration by Acting AG Blanche established a new doctrine to protect developers from becoming targets of federal investigations solely for developing open-source tools or decentralized protocols. He emphasized that DOJ resources should be focused on terrorists and drug traffickers committing actual crimes, rather than on the developers building the technological foundations.

We will not criminalize software development itself. The DOJ's targets are not the technology itself, but those who exploit that technology to intentionally aid in crimes.

The roots of this policy shift trace back to the so-called "Blanche Memo" released on April 7, 2025. Then-Deputy Attorney General Blanche specified in a document titled "Ending Regulation by Prosecution" that the DOJ is not a digital asset regulator and criticized the previous administration's crypto enforcement strategy as "reckless and poorly designed." This memo served as the foundation for the policy announced today and became a decisive turning point in recalibrating enforcement priorities within the DOJ.

Establishment of the 'Willfulness' Standard and Legal Technicality

The core of the new enforcement strategy is the presence of "willfulness." This stands in stark contrast to the prosecution cases of Tornado Cash and Samourai Wallet developers that took place throughout 2024 and 2025. In the past, the mere act of deploying immutable smart contracts could lead to charges of violating anti-money laundering laws, but now, proving that the defendant was aware of a third party's criminal acts and acted intentionally to assist them has become a prerequisite for prosecution.

• Need to prove clear awareness and intent regarding criminal involvement
• Strengthening immunity for the distribution of open-source code itself
• Separation of legal liability between decentralized protocol operators and mere developers
• Linking with policies for reduced penalties in cases of voluntary reporting and cooperation

However, this policy shift did not occur without political friction. On January 28, 2026, several lawmakers, including Senator Mazie Hirono, sent a letter to Acting AG Blanche expressing doubts about the decision to scale back crypto enforcement. They called for an intensive investigation into the possibility of a conflict of interest in the DOJ's policy-making process, specifically pointing out that Acting AG Blanche personally holds cryptocurrency assets.

Nevertheless, the industry expects this announcement to be a decisive moment in preventing the "brain drain" of technical talent from the United States. Coupled with the DOJ's department-wide corporate enforcement policy update released in March 2026, crypto companies can now move beyond simple fear of regulation and focus on providing operational evidence and building voluntary compliance systems. This is seen as laying the legal groundwork for the US to re-emerge as a hub for Decentralized Finance (DeFi) innovation.

Future Outlook and Points to Watch

For the DOJ's policy shift to take hold in the long term, the direction in which ongoing developer-related cases are handled is crucial. Industry experts are watching to see whether the DOJ will drop charges against previously indicted developers or significantly adjust their sentences. Furthermore, efforts to codify these protections through legislation are expected to follow, ensuring they remain in place regardless of changes in the administration.

• Whether pending developer prosecution cases are dismissed or settled
• Possibility of legislative support, such as the enactment of a "Code Protection Act" by Congress
• Whether regulatory consistency is achieved with other government agencies (SEC, CFTC)
• Changes in the influence of US policy within international law enforcement cooperation frameworks