Instead of redirecting these resources towards immigration enforcement, terrorism and drug trafficking, the U.S. Department of Justice has announced plans to mitigate investigations into cryptocurrency fraud.
In a memo late Monday, Deputy Attorney General Todd Blanche cited President Donald Trump’s pledge to “end the regulatory weaponization” of the cryptocurrency industry.
“The Department of Justice is not a digital asset regulator,” writes Blanche.
“The Department of Justice will no longer pursue litigation and enforcement measures that have the effect of overlaying regulatory frameworks on digital assets.”
Instead, Blanche explained that Trump’s regulators in other sectors will implement financial laws “outside the framework of punitive criminal justice.”
“Prosecutors should not claim a regulation violation if digital assets are included,” Blanche wrote.
As part of the change, the Department of Justice will immediately dismantle the National Cryptocurrency Enforcement Team (NCET), which began in February 2022 under the control of former President Joe Biden.
The team was designed to pursue cases of suspected fraud and illegal financial schemes.
In 2024, he announced his conviction in the first “Open Market Operating Case of Cryptocurrency.” Abraham Eisenberg, the suspect, has been found guilty of commodity fraud for artificially manipulating the price of cryptocurrency. That allowed him to raise $110 million in cryptocurrency, according to prosecutors.
NCET is also leading well-known research into cryptocurrency companies such as Binance and Tornado Cash.
Trump repeatedly denounced the Biden administration and set out to dismantle some of the former president’s signature policies, including the NCET.
In Monday’s memo, Blanche reverberated Trump by denounced “previous administrations” for pursuing “a reckless strategy of prosecutors’ regulation.”
Trump is trying to distance himself from Biden’s investigation into the little-regulated cryptocurrency industry and instead settles himself as the champion of digital currency.
On January 23rd, three days after returning to the White House for its second term, Trump issued Executive Order 14,178 entitled “Strengthening American Leadership in Digital Finance Technology.”
It cancelled Biden-era executive action that promoted “responsible development” of cryptocurrency, and instead laid the foundation for a “national digital asset stockpile.”
In the weeks since then, Trump carried out that pledge and announced his National Strategy Preparation for Cryptocurrency in early March. He appointed five currencies to the reserves: XRP, Cardano, Solana, Bitcoin and Ethereum.
Trump also released his own “Meme Coin,” bringing business benefits to cryptocurrency company World Liberty Financial (WLF), winning billions of dollars for him and his family. However, critics have questioned the ethics of these ventures given Trump’s distinctive role in the global economy.
Nevertheless, Trump calls himself a “crypto president,” but nevertheless continues to overture the digital currency industry.
For example, he met with cryptocurrency leaders at the White House on March 7th, and was called the “First White House Digital Assets Summit.”
“Last year, I promised America to be the world’s Bitcoin superpower and the crypto capital of the planet. We are taking historic actions to fulfill that promise,” Trump said at the meeting.
“This will be a virtual Fort Knox for Digital Gold to be housed within the US Treasury Department. That’s a big deal,” he added.
He also painted similarities between his legal calamity and his investigation into the cryptocurrency industry. In 2023, Trump became the first president in history to be charged with criminal charges, and in 2024 he was convicted in New York for forgerying business documents.
“They made the government an armed against the entire industry,” Trump said of his actions investigating the Biden administration’s cryptocurrency company.
“I think that feeling is probably better than you, and it all will soon be over.”
Under Trump’s direction, the federal government has actually stopped doing some research into the cryptocurrency business.
For example, the Securities and Exchange Commission (SEC) dropped the investigation into Coinbase, and the Department of Justice has concluded the investigation into Robinhood, a financial company that is being treated incorrectly with crypto assets.
Nevertheless, Monday’s memo said some cryptocurrency investigations will remain a priority for the Department of Justice.
Instead, Blanche said the division will “reduce economic harm to digital asset investors and consumers and narrow its scope to focus on illegal activities that support cartels, drug traffickers and designated “terrorist” groups.
“For example, cartels and human trafficking and smuggling rings have become increasingly transformed into digital assets to fund their businesses and to wash the revenue from illegal businesses,” writes Blanche.
The department will continue to pursue cartels and criminal organizations that use digital currencies, but Blanche has designated that his prosecutors “do not pursue actions against the platforms these companies use to carry out illegal activities.”
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