In a significant shift in federal enforcement strategy, the U.S. Department of Justice has officially dissolved its National Cryptocurrency Enforcement Team, according to an internal memo issued Monday night by Deputy Attorney General Todd Blanche.
The memo outlines a transition toward a more decentralized model, placing responsibility for digital asset cases in the hands of U.S. attorney’s offices across the country. These offices will now concentrate their efforts on crimes involving digital assets that intersect with national security threats, particularly terrorism.
Moving forward, enforcement will prioritize the prosecution of individuals exploiting digital assets for criminal activities such as terrorism financing, drug and human trafficking, organized crime, cyberattacks, and financial support of cartels and gangs. The focus will also remain on protecting investors targeted in fraudulent crypto schemes.
The closure of the unit marks a broader regulatory realignment under President Donald Trump, whose administration has taken a more crypto-friendly stance—a key theme in his 2024 campaign.
Originally launched in 2022 during President Joe Biden’s term, the now-defunct unit was tasked with tackling illicit cryptocurrency activity. It played a pivotal role in major investigations, including the case against Binance and its CEO, Changpeng Zhao, who admitted in 2023 to violating U.S. anti-money laundering regulations—resulting in a $4.3 billion penalty.
A Strategic Retreat — DOJ Scales Back Crypto Oversight Amid Policy Shift
In line with the Department of Justice’s new directive, prosecutors have been ordered to wind down ongoing cryptocurrency-related investigations that no longer align with updated priorities. The memo emphasizes a dramatic change in approach, stating that enforcement will no longer target crypto exchanges, mixing or tumbling services, or offline wallets for the actions of their users or accidental regulatory breaches.
This pivot represents a stark departure from prior enforcement practices. Moving forward, prosecutors are instructed not to pursue financial law violations—such as operating without a money transmission license or offering unregistered securities—unless there is clear evidence that the accused knowingly violated the law.
The shift arrives as former President Donald Trump and his family expand their involvement in the crypto space. Among their ventures is a still-unlaunched decentralized digital banking platform, World Liberty Financial, which has already raised $550 million in token sales and allocates 75% of its profits to Trump-affiliated entities. The family is also profiting from branded meme coins linked to both Trump and former First Lady Melania.
As part of the DOJ’s overhaul, the Market Integrity and Major Frauds Unit will fully withdraw from cryptocurrency enforcement. However, the Computer Crime and Intellectual Property Section will continue to support these efforts by offering training and serving as a point of contact with the digital asset industry.
The memo offers a sharp critique of past enforcement strategies, accusing the previous administration of using criminal prosecutions as a substitute for clear regulatory guidance. The department’s revised stance narrows its focus to prosecuting only those who intentionally leverage digital assets to engage in or support serious criminal activity.
DOJ Refines Crypto Enforcement Focus Amid Deregulatory Shift
The Justice Department reaffirmed its commitment to investigating and prosecuting digital asset-related crimes that involve investor fraud or facilitate serious criminal activities such as terrorism, human trafficking, cartel operations, and cybercrime. However, the department clarified that it will no longer pursue actions that effectively impose regulatory frameworks on the digital asset industry, shifting that responsibility to financial regulators outside the criminal justice system.
The memo further signals a broader deregulatory trend under the Trump administration, which has seen the Securities and Exchange Commission (SEC) scale back or abandon several high-profile enforcement actions. Additionally, the administration revoked a banking regulation that previously prevented Wall Street banks from adopting cryptocurrency practices.
Despite the administration’s deregulatory stance, the cryptocurrency market has faced significant downturns. Bitcoin is trading around $78,000, a considerable drop from its peak of nearly $110,000, and the overall crypto market has lost over $1.2 trillion in market capitalization since December.
The Justice Department did not immediately respond to CNBC’s request for comment on these developments.
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