The U.S. Department of Justice has dismantled its National Cryptocurrency Enforcement Team, a key unit established under President Joe Biden to target digital asset-related crime, signaling a sweeping change in federal policy toward cryptocurrency enforcement. The move, announced Monday night in a memo from Deputy Attorney General Todd Blanche, marks a shift in focus from industry oversight to prosecutions centered on national security threats and violent crime.
Blanche directed federal prosecutors to wind down investigations that do not involve terrorism, narcotics trafficking, human smuggling, or organized crime. Efforts will 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 memo stated.
The decision aligns with President Donald Trump's deregulatory approach to crypto markets and follows an executive order promoting access to open blockchain networks. Blanche, a former Trump defense attorney confirmed as the DOJ's No. 2 official in March, described the Biden-era policy as a "reckless strategy of regulation by prosecution."
Established in 2022, the National Cryptocurrency Enforcement Team led probes into some of the industry's highest-profile fraud cases, including the $4.3 billion settlement with Binance and the prosecution of its founder Changpeng Zhao for anti-money laundering violations. Its closure will transfer enforcement authority to individual U.S. Attorney's Offices, while the DOJ's Computer Crime and Intellectual Property Section will provide support and training.
The memo also confirmed that prosecutors should not charge crypto exchanges, wallet providers, or mixers for the acts of users or for "unwitting violations of regulations." Prosecutors must prove willful misconduct to bring charges under financial regulations, including unlicensed money transmission and unregistered securities offerings.
Additionally, the Market Integrity and Major Frauds Unit, which previously spearheaded civil and criminal actions involving digital assets, will end its crypto-related enforcement work entirely. The DOJ emphasized that ongoing or new litigation that "superimposes regulatory frameworks" on digital asset firms would be halted, deferring such responsibilities to the Securities and Exchange Commission and other non-criminal regulators.
This marks a dramatic reversal of strategy under Trump, whose administration has embraced the digital asset sector both politically and commercially. The Trump family has stakes in several crypto ventures, including World Liberty Financial, which has sold over $550 million in tokens and directs 75% of profits to Trump-affiliated entities. The family is also tied to meme coin projects such as $TRUMP and $MELANIA, which the issuers say are "expressions of support" and not investment vehicles.
The Securities and Exchange Commission has already paused several high-profile crypto enforcement actions in recent weeks. The Office of the Comptroller of the Currency, a key banking regulator, also issued new guidance last month allowing banks to resume selected crypto activities.
Bitcoin, which reached an all-time high of nearly $110,000 in February, is now trading around $78,000, and the broader crypto market has lost more than $1.2 trillion in market value since December. Despite market volatility, the Trump administration's rollback of crypto regulation is likely to further accelerate venture activity and speculative investment in the sector.
