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WASHINGTON (AP) — The Justice Department is disbanding a team of prosecutors who targeted cryptocurrency crimes and is shifting its focus away from complex crypto-related cases involving banking and securities law, according to a memo reviewed by The Associated Press.
“The Department of Justice is not a digital assets regulator,” Deputy Attorney General Todd Blanche said in a memo sent to prosecutors Monday.
It’s the latest move by the Trump administration to try to boost the cryptocurrency industry while undoing the Biden administration’s efforts to crack down on wrongdoers in the industry. The Trump administration’s effort has included a similar shift in crypto-related enforcement priorities at the Securities and Exchange Commission. Blanche’s memo is part of a larger move by the Justice Department to step back from certain white-collar enforcement to align with President Donald Trump’s priorities of tackling illegal immigration, gangs and drug crimes.
Blanche said the Biden administration had used the department to “pursue a reckless strategy of regulation by prosecution, which was ill conceived and poorly executed.” Instead, Blanche said, the department's narrower crypto-related priorities will target people and entities that rip off crypto investors or use digital assets to fund criminal conduct like human trafficking, drug running or terrorism.
The crypto industry, which spent heavily to help Trump win election, has long complained that the Biden administration unfairly targeted innocent actors with either criminal or civil enforcement actions. Opposing the ongoing criminal case against the developers behind Tornado Cash, a tumbler used to hide ownership of crypto assets, has been a celebrated cause among some privacy and crypto enthusiasts.
“We should be going after bad guys. Not the developers of good tools that bad guys happen to use,” Peter Van Valkenburgh, the executive director of the advocacy group Coin Center, said on X in praise of Blanche’s memo.
The National Cryptocurrency Enforcement Team was created during President Joe Biden's administration with the explicit goal of targeting exchanges, mixers and others “that are enabling the misuse of cryptocurrency and related technologies to commit or facilitate criminal activity.”
But Blanche said those kinds of entities will no longer be targeted for “the acts of their end users or unwitting violations of regulations.”
Blanche said the National Cryptocurrency Enforcement Team’s disbandment is effective immediately. He also said the Market Integrity and Major Frauds Unit “will cease cryptocurrency enforcement in order to focus on other priorities, such as immigration and procurement fraud.”
Once a crypto skeptic, Trump, a Republican, has pledged to make the U.S. the world capital of crypto. He and his sons have also sought to expand their personal fortunes with various crypto-related enterprises.
