The US Justice Department (DOJ) has disbanded its National Cryptocurrency Enforcement Team, signaling a significant change in the federal government’s approach to combating crypto-related crimes.
This decision, announced in a memo by Deputy Attorney General Todd Blanche, reflects a broader pivot towards decentralized enforcement, with local US attorney’s offices taking the lead in handling digital asset cases.
Major Changes In US Crypto Enforcement
As reported by CNBC, the memo outlines a strategic shift that prioritizes prosecuting individuals involved in serious crimes utilizing digital assets, particularly those linked to terrorism, human trafficking, among others, marking a departure from the previous unit’s broader mandate, which included addressing illicit cryptocurrency use.
Established in 2022 during the Biden administration, the National Cryptocurrency Enforcement Team was tasked with tackling the illegal use of cryptocurrencies.
It played a pivotal role in high-profile investigations, including the case against digital asset exchange Binance and its founder, Changpeng Zhao, who pleaded guilty to violating US anti-money laundering laws, resulting in a substantial $4.3 billion settlement.
As part of this transition, prosecutors have been directed to close ongoing investigations that do not align with the new focus. The DOJ has also made it clear that it will not pursue enforcement actions against crypto exchanges, or offline wallets for their users’ activities or any unintentional regulatory breaches.
The memo also specifies that violations of financial laws, such as unlicensed money transmission and unregistered securities offerings, will not be charged unless there is clear evidence that the defendant knowingly and willfully broke the law.
This change aligns with President Donald Trump’s executive order advocating for more accessible blockchain networks and reflects a broader deregulatory agenda within his administration.
DOJ Shifts Focus To Individual Accountability
The DOJ’s new policy emphasizes a focus on individual accountability for those who exploit digital assets for criminal purposes, rather than imposing regulatory frameworks through criminal enforcement.
The memo criticizes past efforts under the Biden administration that sought to use criminal enforcement as a de facto regulatory tool for the cryptocurrency sector.’
While 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 provide guidance and training to DOJ personnel and maintain connections with the digital asset industry.
This regulatory overhaul comes amid a backdrop of heightened interest in cryptocurrency from Trump and his family, who have ventured into various crypto projects.
One notable initiative is the decentralized finance (DeFi) platform, called World Liberty Financial (WLFI), which has reportedly sold $550 million in tokens, with a significant portion of profits directed to Trump-linked entities.
Featured image from DALL-E, chart from TradingView.com
