Commitment to Digital Asset Security
In a recent address at the American Innovation Project Summit in Jackson, Wyoming, Acting Assistant Attorney General Matthew R. Galeotti outlined the Justice Department’s commitment to ensure that the burgeoning digital asset sector operates securely and responsibly. He emphasized the department’s dual mission: to enforce criminal laws effectively while protecting the rights of victims across various criminal activities, including financial fraud, narcotics trafficking, and cybercrime.
Fostering Innovation and Targeting Bad Actors
Galeotti noted the importance of fostering an environment conducive to innovation within the digital asset industry. Arguing that as these technologies become more integrated into the economy, it is critical to establish safeguards that allow creators and users to engage with them confidently. He highlighted efforts to specifically target bad actors who misuse digital assets, which is vital to maintaining public trust and ensuring that legitimate players can thrive.
Clarifying the Role of Prosecutors
During his remarks, he referred to a memorandum issued by Deputy Attorney General Todd Blanche in April, reiterating that prosecutors are not in the business of regulatory oversight or legislating. Rather, their role is to apply the law fairly, based on evidence, and to uphold constitutional standards, particularly regarding due process—ensuring individuals are aware of applicable laws.
Addressing Industry Concerns
Galeotti addressed concerns expressed by industry representatives regarding potential criminal liability for developers and the publication of code. He clarified that without intent to commit a crime, merely creating software or tools is not punishable under law. He welcomed feedback and letters from the industry, as they have raised significant discussions surrounding the limits of liability for actions related to unlicensed money transmission.
Justice Department’s Stance on Liability
To clarify the Justice Department’s stance, he stated that under 18 U.S.C. § 1960, regulatory violations regarding unlicensed money transmission will not result in charges unless there is proof of willful violation. While there could be prosecutions based on knowingly facilitating criminal activities, he assured that actions taken would align with principles of fairness and clarity.
Distinguishing Between Innovators and Criminals
Galeotti stressed the importance of distinguishing between malicious actors and compliant developers, asserting that good-faith innovation should not lead to criminal prosecution for innocuous actions. He stated that while the department will strike hard against criminals exploiting new technologies, well-meaning innovators should not fear undue scrutiny. He reaffirmed the department’s commitment to simplifying accountability to ensure bad actors are held responsible without jeopardizing the work of legitimate developers.
Conclusion: Balancing Innovation and Regulation
The Assistant Attorney General concluded by reaffirming the Justice Department’s focus on combating criminal activities associated with the digital asset space, citing recent prosecutions that illustrate its commitment—such as actions against money laundering syndicates and fraud schemes linked to cryptocurrency. He expressed confidence in the industry’s collective efforts to uphold integrity and combat consumer exploitation.
In sum, Galeotti’s address marked a proactive step toward achieving a balance between innovation and regulation in the digital finance landscape, eager to reassure innovators of their space while remaining vigilant against crime.
