(WASHINGTON) — The Trump administration is pulling back its enforcement of crypto regulations, disbanding a unit dedicated to cryptocurrency enforcement
The Justice Department instructed federal prosecutors to “no longer target virtual currency exchanges, mixing and tumbling services, and offline wallets for the acts of their end users or unwitting violations of regulations,” according to a memo from the U.S. deputy attorney general reviewed by ABC News.
“The Department of Justice is not a digital assets regulator,” the memo said. “The National Cryptocurrency Enforcement Team (NCET) shall be disbanded effective immediately.”
The shift is consistent with President Donald Trump’s other pro-crypto policies, including directives to the Securities and Exchange Commission and the Commodity Futures Trading Commission to ease up on crypto regulation and the creation of a digital assets reserve.
Deputy Attorney General Todd Blanche’s memo attacked the Biden administration, which he said, “used the Justice Department to pursue a reckless strategy of regulation by prosecution, which was ill conceived and poorly executed.”
Blanche said the Trump administration’s prosecutions and investigations involving the crypto industry would focus on “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 suggests the Justice Department would no longer be interested in some of the biggest crypto cases brought under the prior administration, including Tornado Cash, which allegedly laundered more than $1 billion, and the hacker Avraham Eisenberg, who was convicted in April 2024 of a $110 million market-manipulation case. Both prosecutions were brought by the U.S. Attorney’s Office for the Southern District of New York.
Blanche also appeared to criticize how the office approached the prosecution of Sam Bankman-Fried, who the prior administration said orchestrated “one of the biggest financial frauds in American history.”
Blanche said some investor victims have only been able to recover the value of their digital assets at the time the fraud was perpetrated.
“The effect: digital asset investors’ losses may be calculated at a value when the digital asset market was at a lower point, and victims who bore the risk of loss are unable to benefit from corresponding gains that occurred during or after the period in which they were victimized and would otherwise have possessed the asset,” the memo said, adopting an argument made by Bankman-Fried that investors he defrauded have been made whole. Blanche instructed prosecutors to change their approach.
A spokesman for the U.S. Attorney’s Office in Manhattan declined to comment.
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