The U.S. Department of Justice dismantled its National
Cryptocurrency Enforcement Team in a move away from sweeping regulation and
toward a narrower focus on prosecuting serious criminal activities involving
digital assets, CNBC reported.
The change aligns with President Donald Trump’s
pro-crypto policy agenda and underscores his administration’s commitment to
roll back Biden-era regulatory actions.
DOJ Redirects Focus to Terrorism and Fraud
The decision, outlined in a late-night memo by Deputy
Attorney General Todd Blanche, instructs federal prosecutors to concentrate
their efforts on crimes such as terrorism financing, drug trafficking, and
organized crime that use cryptocurrency as a tool, not the technology itself.
The Justice Department will no longer pursue cases
against exchanges, mixers, tumblers, or wallet services unless there is clear
evidence of willful wrongdoing. Routine violations of financial laws, such as
operating without proper registration, will also be exempt from criminal
charges unless intent can be proven.
Formed in 2022, the National Cryptocurrency
Enforcement Team was a key part of the Biden administration’s effort to tackle
illicit activity in the digital asset space. Its most notable case was against
Binance and its founder, Changpeng Zhao, resulting in a $4.3 billion settlement
and a guilty plea for anti-money laundering violations.
However, critics argued that the team’s actions blurred the line between law enforcement and financial regulation. Blanche’s memo directly
accuses the previous administration of practicing “regulation by prosecution”
and calls for that approach to end.
Support Roles, Not Enforcement
While the Market Integrity and Major Frauds Unit will
exit the crypto space entirely, the DOJ’s Computer Crime and Intellectual
Property Section will reportedly continue to provide internal support. That includes
training and liaising with crypto industry stakeholders but not initiating
cases.
Ongoing investigations that do not align with the
department’s new priorities must be closed. The move effectively resets the
federal government’s law enforcement strategy on cryptocurrency to focus solely
on malicious actors using digital assets for high-stakes criminal activity.
President Trump has taken a vocal stance in favor of
digital assets and has financial interests in several crypto ventures. Among
them is World Liberty Financial, a yet-to-launch decentralized banking platform
reportedly tied to the Trump family, which has raised over $500 million in
token sales.
The DOJ’s realignment fits into a broader rollback of
federal oversight. Since Trump took office, regulatory agencies like the SEC
have paused or shelved multiple high-profile enforcement actions. Banking
regulators have also eased restrictions, opening the door for Wall Street’s
increased participation in crypto.
This article was written by Jared Kirui at www.financemagnates.com.