Department of Justice Discontinues Cryptocurrency Enforcement Team, Abolishing Regulatory Approach Through Prosecution
The U.S. Department of Justice (DOJ) has frozen its cryptocurrency enforcement effort, marking a drastic change in federal authorities' management of digital assets. This move comes after President Donald Trump's January executive order, demanding more certainty and clarity in crypto regulation.
In a memo entitled "Bidding Adieu to Regulation by Prosecution," Deputy Attorney General Todd Blanche communicated to staff on April 7, 2025, that the National Cryptocurrency Enforcement Team (NCET) no longer exists. The NCET's establishment under the Biden administration in 2022 was designed to spearhead federal crypto investigations.
"The DOJ is not a digital assets regulator," Blanche stated in his four-page memo. "The previous Administration's strategy of 'regulation by prosecution' was ill-conceived and haphazardly executed. The DOJ will no longer instigate litigation or enforcement actions that inadvertently impose regulatory frameworks on digital assets while actual regulators tackle this outside the punitive criminal justice system.”
Under this new policy, the DOJ will no longer inspect cryptocurrency exchanges, wallet providers, or mixers for infractions committed by their users or unintended regulatory breaches. Such infractions include violations of the Bank Secrecy Act, unlicensed money transmission, and federal securities or commodities laws.
Blanche clarified that efforts would instead be directed toward apprehending individuals who use cryptocurrency to fuel illegal activities, such as terrorism financing, organized crime, or conning digital assets investors.
Blanche further declared, "Any ongoing cases that contradict the aforementioned standards should be terminated." His office will work hand-in-hand with the DOJ's criminal division to examine and scrutinize existing cases based on the new policy.
The NCET isn't the sole unit affected by the Trump administration's revised stance. The U.S. Commodity Futures Trading Commission (CFTC) has also scaled down its specialized enforcement teams, including crypto-focused teams, to simply two units. CFTC's Acting Chairperson, Caroline Pham, stated the goal is to bolster efficiency and eradicate the practice of regulation via enforcement.
- The National Cryptocurrency Enforcement Team (NCET), established under the Biden administration in 2022 to spearhead federal cryptocurrency investigations, has been disbanded, according to a memo from Deputy Attorney General Todd Blanche on April 7, 2025.
- Blanche, in his memo titled '"Bidding Adieu to Regulation by Prosecution,"' stated that the DOJ will no longer instigate litigation or enforcement actions that inadvertently impose regulatory frameworks on digital assets.
- Under the new policy, the DOJ will no longer inspect cryptocurrency exchanges, wallet providers, or mixers for infractions committed by their users or unintended regulatory breaches, such as violations of the Bank Secrecy Act, unlicensed money transmission, and federal securities or commodities laws.
- Efforts will instead be directed toward apprehending individuals who use cryptocurrency to fuel illegal activities, such as terrorism financing, organized crime, or conning digital assets investors, as declared by Blanche.
