- Department of Justice is scaling back cryptocurrency fraud enforcement efforts per a memo from Deputy Attorney General Todd Blanche.
- DOJ will now focus only on crypto crimes related to narcotics dealing and human trafficking rather than regulatory aspects.
- The National Cryptocurrency Enforcement Team established in 2022 will be disbanded as part of Trump administration policy shifts.
The Department of Justice announced plans to significantly reduce its cryptocurrency fraud enforcement efforts, according to an internal memo obtained by The Washington Post. Deputy Attorney General Todd Blanche informed staff on Monday that the DOJ will cease pursuing litigation and enforcement actions related to regulatory aspects of digital assets, redirecting prosecutors to focus exclusively on crimes committed using cryptocurrency, such as narcotics trafficking and human trafficking.
Major Enforcement Changes
The memo outlines the dismantling of the National Cryptocurrency Enforcement Team, a specialized unit established in 2022 specifically to address criminal misuse of cryptocurrencies and digital assets. Blanche has also ordered the closure of all current investigations that don’t align with the department’s new, narrower enforcement guidelines.
This policy shift follows President Trump’s recent executive order directing the Department of Justice to reevaluate and regulate guidelines impacting digital currency. During his 2024 campaign, Trump promised to ease regulations on cryptocurrency companies, a stance that attracted significant donations from technology investors.
Presidential Pardons Signal Policy Direction
Last month, Trump demonstrated his administration’s cryptocurrency policy direction by pardoning four individuals connected to the cryptocurrency exchange Bitmex. The founders of the exchange had previously pleaded guilty in 2022 for failing to implement required anti-money laundering and identity verification systems.
The Justice Department’s new approach represents a significant reversal from previous years when federal prosecutors more aggressively pursued various forms of cryptocurrency-related violations. Under the new directive, prosecutors will narrow their focus exclusively to cases where cryptocurrency serves as a tool for clearly defined criminal activities like drug dealing and human trafficking, rather than regulatory compliance issues.
The policy change reflects the administration’s broader stance on reducing regulatory barriers for the cryptocurrency industry, which has become an increasingly influential sector in both technology and finance.
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