DOJ Dismantles Crypto Enforcement Unit, Refocuses on Criminal Use of Digital Assets

The U.S. Department of Justice (DOJ) is shutting down its National Cryptocurrency Enforcement Team (NCET) and refocusing its approach to digital asset investigations, according to a memo obtained by Reuters.

The memo, issued late Monday by Deputy Attorney General Todd Blanche, directs federal prosecutors to narrow their cryptocurrency enforcement priorities, emphasizing cases linked to terrorism, drug trafficking, and organized crime. Per Reuters, the directive marks a significant departure from the previous administration’s approach, which aggressively pursued regulatory and criminal actions against players in the crypto space.

Established in February 2022, NCET played a central role in high-profile investigations, including the case against Binance and its founder Changpeng Zhao, who pleaded guilty to violating anti-money laundering laws. According to Reuters, the unit had been a cornerstone of President Joe Biden’s broader strategy to crack down on fraud and illicit finance in the rapidly evolving digital asset market.

However, under President Donald Trump, whose family has entered the crypto industry, the DOJ is now charting a different course. Blanche’s memo criticizes what he called the Biden administration’s “reckless strategy of regulation by prosecution,” and instructs DOJ staff to cease investigations that fall outside the new, narrowed focus.

Related: Democratic Lawmakers Urge SEC to Preserve Records on Trump Crypto Venture

“All ongoing matters inconsistent with this policy should be closed,” Blanche wrote in the memo, per Reuters.

In his communication, Blanche referenced one of Trump’s executive orders that supports access to “open blockchain networks without persecution.” That order underscores the administration’s intent to foster a more favorable environment for blockchain innovation and investment.

Blanche, who was confirmed as the DOJ’s second-in-command last month and previously served as Trump’s criminal defense attorney, also ordered that prosecutors refrain from charging companies with federal banking, securities, or commodities violations unless there is clear evidence of willful misconduct.

The memo further instructs DOJ attorneys to stop targeting virtual currency exchanges, self-custody wallets, and privacy-enhancing tools such as mixers and tumblers solely for user-related offenses or inadvertent compliance failures, according to Reuters.

This policy overhaul comes as other regulatory agencies follow suit. The Securities and Exchange Commission has reportedly scaled back its crypto enforcement efforts and paused several high-profile lawsuits. A banking regulator also recently allowed certain crypto activities at U.S. banks, signaling a broader regulatory retreat.

Trump’s administration has embraced the digital asset sector more openly than its predecessor. During his 2024 campaign, Trump pledged to make the U.S. the “crypto capital of the planet.” Reuters has reported that the Trump family now has a financial stake in World Liberty Financial, a crypto venture from which it is entitled to 75% of net token sale revenues. Additionally, the former president and First Lady Melania Trump have lent their names to meme coins — $TRUMP and $MELANIA — which their backers claim are not securities, but rather tokens of support.

Source: Reuters