Disbanding Justice Department crypto enforcement team

Washington (AP)— A document acquired by The Associated Press states that the Justice Department is disbanding a cryptocurrency crime unit and shifting its attention away from complicated crypto-related banking and securities law prosecutions.

Todd Blanche, the Deputy Attorney General, said in a document that was delivered to the prosecutors on Monday that the Department of Justice is not a regulator of digital assets.

This is the latest step by the Trump administration to support the cryptocurrency business while undermining the Biden administration’s crackdown on wrongdoers. The SEC has also changed its crypto enforcement goals under the Trump administration. Blanche’s letter is part of the Justice Department’s pullback from white-collar enforcement to focus on illegal immigration, gangs, and narcotics offenses under President Donald Trump.

Blanche said the Biden administration had used the agency to “pursue a reckless strategy of regulating by prosecution, which was ill planned and poorly executed.” Blanche said the department’s narrower crypto priority would target crypto investors who are defrauded or use digital assets to support human trafficking, drug trafficking, or terrorism.

Crypto business, which invested significantly to help Trump win, has long alleged that the Biden administration unjustly targeted innocent players with criminal or civil prosecution. Some privacy and crypto fans have applauded opposing the prosecution case against Tornado Cash’s inventors, who employed a tumbler to mask crypto asset ownership.

“We should target evil folks. Not the makers of useful technologies that bad folks use,” Coin Center executive director Peter Van Valkenburgh said on X, praising Blanche’s memo.

The National bitcoin Enforcement Team was established under President Joe Biden to target exchanges, mixers, and others “that are enabling the misuse of cryptocurrencies and associated technologies to engage in or promote criminal activity.”

Blanche said such firms would no longer be pursued for “the acts of their end users or unwitting violations of regulations.”

Blanche announced the NCET’s disbandment immediately. The Market Integrity and Major Illegal activities Unit “will cease cryptocurrency prosecution in order to concentrate on other priorities, such as migration and procurement fraud.”