Department of Justice Headquarters in Washington, D.C. on April 18, 2022.
Kent Nishimura | Los Angeles Times | Getty Images
The U.S. Justice Department abruptly shut down its National Cryptocurrency Enforcement Team, signaling a major shift in how the federal government will handle crypto-related crimes going forward, according to a memo sent Monday night by Deputy Attorney General Todd Blanche.
In it, Blanche outlines a decentralized approach in which U.S. attorney’s offices will now take the lead on digital asset cases, focusing primarily on crimes involving terrorism.
Going forward, the document said efforts would now focus on “prosecuting individuals who victimize digital asset investors, or those who use digital assets in furtherance of criminal offenses such as terrorism, narcotics and human trafficking, organized crime, hacking, and cartel and gang financing.”
The disbandment of the unit is the latest in a series of sweeping regulatory reversals under President Donald Trump, who made crypto-friendly policies a centerpiece of his 2024 campaign.
Established in 2022 under former President Joe Biden, the National Cryptocurrency Enforcement Team was tasked with addressing the illicit use of cryptocurrencies.
The unit played a central role in high-profile cases, including the investigation into Binance and its founder, Changpeng Zhao, who pleaded guilty in 2023 to violating U.S. anti-money laundering laws, resulting in a $4.3 billion settlement.
Prosecutors have been instructed to close ongoing investigations that do not align with the new priorities, according to the memo.
The DOJ also explicitly states it will not pursue enforcement against crypto exchanges, mixing and tumbling services, or offline wallets for the actions of their users or “unwitting violations of regulations” — marking a major departure from prior policy. Prosecutors are instructed not to charge violations of financial laws, such as unlicensed money transmission and unregistered securities offerings unless they can prove the defendant knew of the rules and willfully broke them.
This policy change aligns with Trump’s executive order advocating for open access to blockchain networks and reflects his administration’s broader support for easing regulations in the digital assets industry, in which he holds a personal stake.
Trump and his family have branched out into multiple crypto projects in the past year. One is a yet-to-be-launched, decentralized digital bank called World Liberty Financial, which has already sold $550 million in tokens. That venture sends 75% of profits to Trump-linked entities. The family also makes money from the Trump- and Melania-branded meme coins.
As part of the latest action, the Market Integrity and Major Frauds Unit will cease all cryptocurrency enforcement efforts.
The criminal division’s Computer Crime and Intellectual Property Section will continue to play a supporting role by providing guidance and training to Justice Department personnel and acting as a liaison to the digital asset industry.
The memo criticized past efforts to use criminal enforcement as a de facto regulatory tool for the cryptocurrency industry under the Biden administration. The Justice Department will narrow its focus to prosecute individuals who use digital assets to commit or facilitate serious crimes.
The Justice Department emphasized it will continue to investigate and prosecute digital asset-related crimes when they involve investor fraud or are used to support terrorism, human trafficking, cartel operations and cybercrime.
“Litigation or enforcement actions that have the effect of superimposing regulatory frameworks on digital assets” will no longer be pursued, the memo states, deferring that responsibility to financial regulators operating outside the criminal justice system.
The Justice Department did not immediately respond to CNBC’s request for comment.
Since taking office, the Trump administration has rapidly scaled back oversight, with the Securities and Exchange Commission pausing or abandoning several high-profile enforcement actions, and revoking a banking rule that blocked Wall Street banks from adopting crypto.
Despite the deregulatory shift, the digital asset market has plunged in the last month alongside equities. Bitcoin is trading at around $78,000, down from its all-time high near $110,000, and the wider crypto market has erased more than $1.2 trillion from its market cap since December.
