The U.S. Department of Justice is shifting its focus away from investigating cryptocurrency fraud. Instead, it plans to allocate resources toward immigration enforcement, terrorism, and drug trafficking. This change comes after a memo from Deputy Attorney General Todd Blanche, which referenced former President Donald Trump’s commitment to reduce regulatory scrutiny in the cryptocurrency sector.
Blanche stated that the Justice Department will no longer engage in litigation or enforcement that imposes regulatory frameworks on digital assets. He emphasized that the department does not see itself as a regulator of digital currencies. Moving forward, enforcement of financial laws will be handled by other agencies outside of the criminal justice system. Prosecutors will not charge regulatory violations in cases involving digital assets.
As part of this new approach, the Justice Department is dismantling its National Cryptocurrency Enforcement Team (NCET), which was established in February 2022 under President Joe Biden. This team was tasked with investigating fraud and illicit financial schemes within the cryptocurrency industry. Notably, NCET had secured a conviction in a case involving cryptocurrency market manipulation, where the suspect was found guilty of fraud that led to a $110 million gain.
The shift in strategy reflects Trump’s ongoing criticism of the Biden administration’s regulatory approach. He has positioned himself as a supporter of the cryptocurrency industry, distancing himself from previous investigations. Since returning to office in January, Trump issued an executive order aimed at bolstering U.S. leadership in digital finance, which revoked a Biden-era directive that sought responsible cryptocurrency development.
In recent weeks, Trump has announced plans for a national strategic reserve for cryptocurrency, naming five currencies to be included—XRP, Cardano, Solana, Bitcoin, and Ethereum. This move has sparked interest and increased the value of these digital assets. Additionally, Trump has launched his own “meme coin” and has ties to a cryptocurrency firm, raising ethical questions about his involvement in the industry.
Despite the easing of investigations into cryptocurrency firms, the Justice Department will still focus on illegal activities that harm investors and consumers. Blanche noted that criminal organizations, including cartels and human traffickers, have increasingly used digital currencies for funding and money laundering. However, the department will not pursue actions against the platforms used by these groups for their illegal operations.
This change in policy marks a significant shift in how the U.S. government approaches cryptocurrency, moving from a regulatory framework to a more focused effort on combating crime related to digital assets.