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The landscape of cryptocurrency regulation and enforcement in the United States is undergoing a significant transformation. Recent developments signal a marked shift in the government’s approach to digital assets, most notably with the U.S. Justice Department’s decision to close the National Cryptocurrency Enforcement Team (NCET). This move, however, does not signify a cessation of enforcement but rather a decentralization of efforts, with U.S. attorney’s offices now poised to take the lead on digital asset-related cases. A key area of focus for these investigations will reportedly be crimes involving terrorism financing through cryptocurrency. This reorganization within the Justice Department arrives amidst a broader context of pro-cryptocurrency initiatives championed by President Donald Trump. These actions are widely interpreted as a deliberate rollback of what his administration perceives as regulatory overreach implemented during the Biden administration, setting the stage for a potentially more permissive environment for the digital asset industry.
DOJ Reorganizes Crypto Enforcement, Prioritizing Terrorism Amidst Pro-Trump Policy Shift
A significant recalibration of federal cryptocurrency crime enforcement is underway in the United States. A recent memo, reportedly circulated by Deputy Attorney General Todd Blanche on Monday night, revealed the abrupt disbandment of the Justice Department’s National Cryptocurrency Enforcement Team (NCET). This move signals a departure from a centralized approach, with U.S. attorney’s offices now set to spearhead digital asset-related investigations.
According to the memo’s content, the revised strategy will place a primary emphasis on prosecuting individuals involved in the victimization of digital asset investors and those utilizing these assets to further serious criminal activities, specifically citing terrorism, narcotics and human trafficking, organized crime, hacking, and cartel financing. The document indicated that future efforts would be directed towards these areas.
This reorganization emerges as the latest in a series of regulatory reversals championed by President Donald Trump, whose administration has openly embraced crypto-friendly policies, a prominent feature of his 2024 campaign. The now-defunct NCET, established in 2022 under the Biden administration, had been tasked with tackling the illicit use of cryptocurrencies and played a key role in notable cases, including the investigation into Binance and its founder, Changpeng Zhao. Zhao had pleaded guilty in 2023 to U.S. anti-money laundering violations, resulting in a substantial settlement.
The memo reportedly instructed prosecutors to conclude ongoing investigations that do not align with these newly defined priorities. Furthermore, the DOJ explicitly stated a shift away from pursuing enforcement against crypto exchanges, mixing and tumbling services, or offline wallets based solely on the actions of their users or unintentional regulatory breaches. Prosecutors have been directed to refrain from charging violations of financial laws, such as unlicensed money transmission and unregistered securities offerings, unless willful intent and knowledge of the rules can be demonstrated.
This policy shift reportedly aligns with President Trump’s executive order advocating for open access to blockchain networks, reflecting his administration’s broader inclination towards easing regulations within the digital asset space, an industry in which he reportedly holds personal financial interests through various crypto ventures involving himself and his family. As part of this restructuring, the Market Integrity and Major Frauds Unit will reportedly cease all cryptocurrency enforcement endeavors. The Criminal Division’s Computer Crime and Intellectual Property Section is expected to continue in a supporting capacity, offering guidance and training to DOJ personnel and serving as a point of contact for the digital asset industry.
Source: create.vista
The memo reportedly contained criticism of past efforts under the Biden administration, which were viewed as using criminal enforcement as an indirect means of regulating the cryptocurrency industry. The Justice Department now intends to narrow its focus to prosecuting individuals who utilize digital assets to perpetrate or facilitate serious crimes.
The Justice Department emphasized its ongoing commitment to investigating and prosecuting digital asset-related crimes involving investor fraud or their use in supporting terrorism, human trafficking, cartel operations, and cybercrime. The memo reportedly stated that “litigation or enforcement actions that have the effect of superimposing regulatory frameworks on digital assets” would no longer be pursued, indicating a deferral of such responsibilities to financial regulators outside the criminal justice system.
Notably, the Justice Department did not immediately respond to requests for comment on these developments. Since President Trump assumed office, his administration has reportedly moved swiftly to scale back oversight, with the Securities and Exchange Commission allegedly pausing or abandoning several significant enforcement actions and revoking a banking rule that had restricted Wall Street banks from engaging with crypto. Despite this deregulatory trend, the digital asset market has experienced a downturn in the past month, mirroring declines in equities, with Bitcoin trading significantly below its recent peak and the broader crypto market seeing a substantial decrease in its overall market capitalization.
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