Shifts in U.S. Cryptocurrency Enforcement by the Justice Department
The U.S. Department of Justice has declared plans to reduce its investigations related to cryptocurrency fraud, reallocating its resources towards immigration enforcement, terrorism, and drug trafficking.
In a memo issued late on Monday, Deputy Attorney General Todd Blanche cited President Donald Trump’s commitment to “end the regulatory weaponization” within the cryptocurrency sector.
“The Department of Justice is not a digital assets regulator,” stated Blanche, emphasizing that the Justice Department will refrain from pursuing litigation or enforcement actions that would impose regulatory frameworks on digital assets.
Blanche clarified that various Trump regulatory authorities in other departments will handle financial laws “outside the punitive criminal justice framework,” suggesting that prosecutors will avoid filing charges for regulatory infractions in cases involving digital assets.
As part of this change, the Justice Department will promptly disband its National Cryptocurrency Enforcement Team (NCET), established in February 2022 during former President Joe Biden’s tenure. The NCET aimed to tackle issues of suspected fraud and illicit financial operations.
Although the NCET achieved a notable conviction in a cryptocurrency market manipulation case involving Avraham Eisenberg, who was charged with fraud for artificially inflating cryptocurrency prices, the team was criticized for its investigations against entities like Binance and Tornado Cash, which faced accusations of facilitating money laundering for North Korea. Trump is actively dismantling aspects of Biden’s policies, including the NCET.
While some cryptocurrency-related investigations will continue to be prioritized by the Justice Department, Blanche noted the department’s focus will shift towards illegal activities that inflict “financial harm to digital asset investors and consumers” and are linked to drug cartels, human traffickers, and designated terrorist organizations.
